The Federal Executive Council (FEC) on Wednesday approved the Multilateral Competent Authority Agreement to prevent tax evasions and avoidance by multinational companies, among other benefits.
This was disclosed to State House correspondents by the Minister of Information, Lai Mohammed, at the end of FEC meeting chaired by President Muhammadu Buhari.
The briefing was also attended by the Minister of Power, Works and Housing, Babatunde Fashola and Minister of Transport, Rotimi Amaechi.
Mohammed also disclosed that Nigeria has lost over N1 trillion to tax evasions by multilateral companies.
The Council, he said, also approved the outline business case for development of Greenfield port facilities at Badagry in Lagos state.
He said: “In respect of the first memo which is the memo for Multilateral Competent Agreement and the exchange of country by country report, the whole essence is to give the government a better grip on its tax laws and also to prevent tax evasions and avoidance by multinational companies.
“Where multinational companies operate in more than one country, it is quite easy for them to move profit from one territory to another territory where the tax laws are very favourable to them.
“And what has happened over the years is that the revenue companies have lost a lot of money. As at the last count over 1 trillion has been lost over a period of time and the revenue companies have found that they were losing more money in terms of tax evasion and avoidance than what they were even receiving as grants from multinational agencies.
“So this is a law that provides that if a company like MTN or Nestle for instance, is operating in Nigeria, not only must he file returns on his activities in Nigeria, he must also file returns on his activities in every other country that they are doing business so that you can see from there whether there is any attempt to hide figures.
“Apart from shoring up our finances, I think it is part of the fight against corruption and it also enhances transparency,” he added
He said that the approval for Greenfield port facilities in Badagry is the first step to approving the establishment of a new sea port in the country.
The approval, he said, showed that Nigeria is still a very preferred investment destination in Africa despite the challenges it is facing.
Fashola said that the Multinational competence authority agreement is consistent with the macroeconomic policy of government to fund its operation and economy with more tax incomes.
According to him, it will allow government to see how much taxable revenues are accruable to it especially from companies.
He said: “It is for transparency and accountability on the private side of the economy because transparency and accountability has been focused perhaps a little more on the public side of our national life.
“When you look at the profit that is coming from the private sector beaming the ray of transparency and accountability on revenues that should come into the public space and be used for national development only helps to strength the economy in the long run and bring probity across board,” he said.
Noting that the Badagry port was long overdue, he said that the ports in Nigeria are behind in terms of technology in the maritime industry.
He said: “There are bigger vessels now being built across the world that require larger depths and drafts berth. Now some of our competitors on the continent like Djibouti are building bigger ports, so if we don’t build this port we risk becoming uncompetitive and we risk a threat to our maritime hub status in the sense that we may become a transshipment port instead of a port of original destination.
Stressing that the work on the port started in 2012, he said that all its financing is coming from the private sector.
“Again that is consistent with what this government stands for in terms of allowing private capital and competency to come into the development of our infrastructure,” he added.
He said that the Badagry port was delayed because of the refusal of the last administration to grant approval for it as the port development was under federal government control
Ameachi said that it would take five years to construct it from the end OBC and FBC concessional agreement.
He said that the port will bring $2.558 billion into the system.
“And that in this period when we are looking for foreign exchange, it is going to bring a total of $2.558 billion into the system and federal and Lagos state government would not contribute financially other than the land given by the Lagos state government,” he stated.
