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Tag: Tax evasion

  • Govt moves against tax evasion ahead passage of reform bills

    Govt moves against tax evasion ahead passage of reform bills

    • Edun inaugurates 50 commissioners of Tax Appeal Tribunal

    Tax evaders face a tough challenge in the reform plans.

    The Federal Government is determined not only to widen the tax net but to prevent evasion, according to Minister of Finance and Coordinating Minister of the Economy Mr Wale Edun. 

    Yesterday, the minister inaugurated the 50-person Tax Appeal Tribunal (TAT).

    Its mandate is to resolve tax disputes and increase revenue for key sectors such as infrastructure, healthcare and education.

    The TAT will operate across the six geopolitical zones with different offices in Lagos and the Federal Capital Territory, Abuja.

    The inauguration of the new set of TAT commissioners came over six months after the July 2024 expiration of the tenure of the last set.

    The inauguration, conducted in line with the Federal Inland Revenue Service (FIRS) Establishment Act 2007, took place in Abuja.

    Edun noted that the TAT plays a crucial role in ensuring fair and efficient resolution of tax disputes, which helps attract investment and create a business-friendly environment.

    He said: “Tax evasion must be curtailed to maintain trust in Nigeria’s tax system and support national development.

    “Reducing tax evasion is essential for strengthening the tax system and funding national development.

    “While tax avoidance is within the law, we must ensure that tax evasion is prevented.”

    Read Also: Nigeria, other African countries lose $50bn annually to tax evasion – ATAF

    The inauguration is in anticipation of the passage of the tax reform bills by the National Assembly, it was learnt yesterday.

    The bills have scaled second reading at both the Senate and the House of Representatives.

    They are now for public hearing on Monday and Tuesday at the Senate and on Wednesday at the House.

    The lawmakers have assured that the bills will be passed for presidential assent before the end of this month.

    Edun noted improvements in economic indicators, including stabilising inflation, declining food prices, and increased oil production.

    According to him, these developments reflect the progress of President Bola Ahmed Tinubu’s Renewed Hope Agenda intended to promote sustainable growth, create jobs, and reduce poverty.

    Minister of State for Finance, Dr. Doris Uzoka-Anite, highlighted the key objectives of the Tribunal.

    These include reducing the incidents of tax evasion, ensuring fairness and transparency in tax administration and minimising delays and bottlenecks in the adjudication of tax disputes.

    She urged the new commissioners to be upright, not toe the path of infamy but adjudicate disputes according to the constitution.

    The Coordinating Secretary of the TAT, Anita Erinne, expressed profound appreciation to the ministers for their unflinching support which has encouraged the Tribunal to achieve its set goals.

    She was confident the Tribunal would promote confidence in Nigeria’s tax system.

    Erinne enjoined the commissioners to hit the ground running and urged the taxpayers and the general public to take advantage of the Tribunal for speedy resolution of tax disputes.

    A commissioner, Aderibigbe Adedeji (SAN), expressed appreciation on behalf of his colleagues to the government for finding them worthy.

    He promised that the Tribunal would live up to its constitutional mandates and expectations.

    Other commissioners of the TAT include: Soyinka-Onijala Moremi, Amoman Oyedele, Falana Gbenga, Ezeudeka Chukwudi, Ibrahim Amina, Ohagwa Chinyere, Olatunde Odanye, Akinola Akindele, Akwiwu Anne, Adimula Ruth, Olamide Obajimi, Agbeluyi Olushola, Obidegwu Chukwuma, Ogunniyi Iyabode, Ladapo Abimbola, Ajila Balelayo, Yussuf Mojirola and Oyenuga Adesola.

    Others are Ummahani Amin, Garba James, Yerima Adamu, Kabir Albakariyu, Ajaegbu Idowu, Okpe Ochanya, Nasiru Muhammad, Adamu Kish, Amadi Ladidi, Bello-Ismail Bintah, Agbu Andrew, Medaiyedu Stephen, Ali Inna, Adebisi Femi, Lwahasmang Setshak Gongle, Obayomi Wole, Obayemi Kolawole, Sanni Sheriff, Fatutu Omotayo, Balogun Yetunde and Nwala Chukwudi.

    The rest are Egbo Jude, Okide Ezigbo, Eromosele Ailenoghionmhan, Sunsuwa Audu, Unimna Ungwugwaye, Eiya Ofiafoh, Aborisade Adeola, Asoro Osariuyimen and Olayinka Adewale.

  • Nigeria, others lose $50b yearly to tax evasion

    Nigeria, others lose $50b yearly to tax evasion

    African nations, including Nigeria, lose approximately $50 billion every year to tax evasion, according to the African Tax Administration Forum (ATAF).

    Speaking at the ongoing ATAF Annual Meeting in Kigali, Rwanda, where leaders and experts convened to address this pressing issue, the Executive Secretary of ATAF, Mr. Logan Wort, said tax evasion constitutes a significant portion of illicit financial flows on the continent. “It is a big driver of money loss in Africa,” he said, stressing its disproportionate impact on economic stability.

    He disclosed that 60 per cent of tax evasion losses stem from corporate activities, where businesses manipulate their tax obligations through aggressive strategies. Additionally, 10-15 per cent of these losses arise from corruption and aggressive tax planning, often facilitated by weaknesses in existing tax policies and enforcement mechanisms.

    A particular focus was placed on the extractive industries, such as mining and oil exploration, where tax evasion is rampant. Mr. Wort explained the common practice: “Typically, companies in extractive industries receive tax-free concessions, such as a 10-year tax holiday, to incentivize exploration. However, some companies exploit this by under-declaring their discoveries.”

    In many cases, companies may strike oil or find minerals within the early months of their tax-free period but delay reporting their findings until the holiday period ends. “This results in governments losing up to a decade’s worth of taxes,” he noted.

    Read Also: AFC coordinates two billion euros syndicated facility for BoI

    To combat such practices, Mr. Wort stressed the need for robust tax policies, solid legislation, and significant investment in technology. “As a government, as a ministry of finance, as tax officials, you avoid this through good and solid policy and legislation. Part of the problem is that many countries on the continent lack strong enough tax frameworks to counter aggressive tax planning,” he stated.

    Cross-border transactions, particularly those involving multinational companies, exacerbate the problem. He stressed the importance of adopting technological solutions that enable real-time monitoring and information exchange between key stakeholders, including central banks, commercial banks, and tax authorities.

    Mr. Wort noted the challenges posed by global businesses that exploit loopholes in weak tax systems.

    “When you have technology and legislation that allows the central bank, businesses, and commercial banks to exchange taxpayer information, you can accurately track money flows, identify beneficiaries, and ensure that requisite taxes are paid before funds leave the country,” he said.

    Such measures, he added, enable authorities to understand the flow of money, detect irregularities, and recover unpaid taxes, whether from individuals or corporations.

    Mr. Wort pointed out the importance of international tax agreements in combating evasion. By signing information exchange agreements, countries can legally share taxpayer information between authorities.

    “This ensures that tax information remains private while allowing authorized officials to access the necessary data to collect the correct taxes,” he explained.

    ATAF he said has been instrumental in helping African countries strengthen their laws and auditing capabilities to curb tax evasion. “With the right legal frameworks and technology, African nations can significantly reduce losses and enhance their revenue generation,” Mr. Wort concluded.

    The ATAF Annual Meeting in Kigali continues to explore strategies for addressing tax evasion. Key discussions focus on implementing stronger legislation, leveraging advanced technology, and fostering cross-border cooperation among African nations.

  • Osun govt shuts firm over N60b tax evasion, environmental degradation

    Osun govt shuts firm over N60b tax evasion, environmental degradation

    Following the face-off between Osun State Government and Segilola Mining Gold Ltd, a magistrates’ court sitting in Osogbo has ordered close-down of the firm till further notice over alleged N60billion tax evasion, flouting of environmental rules and others.

    Consequently, the state government has locked the company’s entrance under the supervision of court bailiff, armed security operatives, including Police Joint Task Force and ‘Amotekun’ operatives.

    The Nation reports that Osun State Government vowed to go after the firm over alleged evasion of N60billion tax, failure of the firm to comply with environmental rules. However, Segilola Mining Gold Ltd denied the allegations, saying it had demonstrated a commitment to being a law-abiding, transparent corporate entity, fulfilling tax obligations.

    A copy of motion ex-parte dated September 27, 2024 filed by Osun State Government through the Attorney-General of Osun State against Segilola Resources Operating Limited in suit number MOS/M.531/2024, contained an order of sealing off gold mining activities in Osun State.

    Read Also: NLC to workers: don’t give up on Nigeria

    The Chief Magistrate, Dr Olusegun Ayilara, gave the order of the closure after the prayer of Osun State Government to the court.

    The Attorney General sought for court order to seal off and lock up business premises of Segilola Gold Firm for violation of Tax Audit on Payee, Withholding Taxes and Development Levy, for the period of 2019-2023 until the due sum is fully liquidated into Osun State Government account.

    Ayilara ordered that “the Attorney-General, Osun State is hereby permitted to seal off and lock up business premises of Segilola Resources Operating Limited in Osun State for violating Tax Audit on Payee, withholding Taxes and Development Levy for the period of 2019-2023 until the due sum is fully liquidated into Osun State Government account.”

  • African economies gain $1.9b from tackling tax evasion, illicit funds

    African economies gain $1.9b from tackling tax evasion, illicit funds

    African countries have generated  $1.9 billion  in tackling tax evasion and illicit financial flows within the continent. 

    According to the 2023 Tax Transparency in Africa  progress report unveiled at the 13th Meeting of the Africa Initiative in Cape Town, African countries realised the additional revenues following  voluntary disclosures, the implementation of information exchange mechanisms, and rigorous offshore investigations.

    From 2009 through 2022, these measures have effectively boosted tax revenue, interest, and penalties, underscoring a substantial progress in tax transparency across the continent. 

    The report—co-produced by the Global Forum on Transparency and Exchange of Information for Tax Purposes , the African Union Commission and the African Tax Administration Forum presents the progress of 38 African countries in tackling tax evasion and other illicit financial flows (IFFs) through transparency and exchange of information. Five non-member countries participated in the study.

    Read Also; Iwuanyanwu: Tinubu should prioritise restructuring Nigeria

    The release of the report comes as African governments continue to step up efforts to bolster domestic resource mobilisation in the face of economic headwinds that include global inflation and mounting debt levels. The Organisation for Economic Co-operation and Development (OECD) estimates that Africa loses as much as $60 billion each year in illicit financial flows.

    Enoch Godongwana, South Africa’s Minister of Finance, disclosed that  during the past eight years, the Africa Initiative has changed the tax transparency landscape in Africa and aided the mobilisation of more  domestic resources. 

    Stressing the importance of political will in efforts to increase tax transparency, Godongwana said, however, that more could be done. He called for the Africa Initiative to strengthen African countries’ capacity to leverage exchange of information standards and protocols.

    Zayda Manatta, Head of the Global Forum Secretariat, presented the report to participants.

    Among the key highlights of the report are for the first time, one African country reported collecting additional taxes—worth €10.6 million— through the use of common reporting standard data.

    The Republic of the Congo, Angola, Zimbabwe and Sierra Leone have joined the Global Forum as 165th, 166th, 167th and 168th members since June 2022.

    23 African countries are now parties to the multilateral Convention on Mutual Administrative Assistance in Tax Matters, the most comprehensive instrument for all forms of  co-operation to tackle tax evasion, thus substantially expanding their Exchange of information networks.

    Manatta cited a World Bank study that projected that participation in exchange of information mechanisms could increase African countries’ tax revenues from 5% to 19% of Gross Domestic Product (GDP).

    “The more familiar countries are with this tool, the more they exploit this tool, the more revenue should be collected. And if you manage to monitor this link between revenue collection and exchange of information, we would be able to further demonstrate the benefits countries are getting from this tool,” she said.

  • Alleged tax evasion: Court orders Jay Jay Okocha’s arrest

    A Lagos High Lagos in Igbosere has issued a bench warrant for the arrest of a former Super Eagles captain, Austin Okocha, popularly known as Jay Jay Okocha.

    Justice Adedayo Akintoye made the order on January 29, following an application by the Lagos State Ministry of Justice after Okocha allegedly failed to appear in court for a 2017 income tax evasion charge.

    The ministry filed a three-count charge against Okocha on June 6, 2017, which accused Okocha of “Failure to furnish return of income for tax purposes with the Lagos State Internal Revenue Service contrary to Section 94 (1) of the Personal Income Tax Act Cap P8 Laws of the Federal Republic of Nigeria 2004 (As Amended).

    “Failure to pay income tax contrary to Section 56(a) and (b) of the Lagos State Revenue Administration Law No. 8 of 2006.

    “Failure to furnish return of Income for tax purposes with the Lagos State Internal Revenue Service contrary to Section 94(1)of the Personal Income Tax Act Cap P8 Laws of the Federal Republic of Nigeria 2004 (As Amended).”

    Prosecuting Counsel Y. A. Pitan, who moved the application for the warrant on January 29, told Justice Akintoye that the case came up for the first time on October 5, 2017 but Okocha failed to appear in court, even though service had been effected on him.

    He said Okocha still didn’t appear after several adjournments.

    In a bench ruling, Justice Akintoye granted the application and issued a bench warrant for Okocha’s arrest.

    The judge adjourned further hearing till last February 19.

    When the case came up on February 19, the prosecution had still not effected the warrant, following which the court ordered that on the next adjourned date the order should have been executed.

    Akintoye adjourned further hearing till April 15.

  • CITN collaborates with ICPC to curb tax evasion

    The Chartered Institute of Taxation of Nigeria (CITN) says it has signed a Memorandum of Understanding (MoU) with the Independent Corrupt Practices and Other Related Offences Commission (ICPC) to curb tax evasion.

    Its President, Mr Ikemefuna Ede, made the disclosure on Thursday, saying that the objective was to enhance capacity development of officers of the commission.

    Ede said that continuous training and capacity building were important elements in building strong institutions and should be encouraged by all organisations.

    “The objective is aimed at equipping the ICPC officers with the required knowledge needed to fight corruption and tax evasion in the tax sector,” he said.

    Ede reiterated the commitment of CITN toward ensuring the immediate implementation of the terms of the MoU.

    He, however, noted that tax evasion was a form of corruption which if allowed to thrive unabated, would spell doom for the continuous existence of Nigeria.

    Ede blamed the rampant tax evasion in the country to weak taxation system, which he said was fixable by the government.

    He noted that the dynamics of government revenue generation showed that taxation remained a major stabilising factor of the global polity. Ede called for more stringent application of the nation’s tax statute by tax authorities against tax defaulters and also against entities that have statutory duties to remit taxes.

    “Taxation is a tool for economic management and development and should support sustainable growth and infrastructure development at all times.

    “Payment of taxes is a civic responsibility of all legible tax payers and evasion of taxes is tantamount to depriving the economy of its sustainable means of economic development.

    “Tax evasion is a major bane in the tax system; it is also a criminal offence and should be strongly decried.

    “Of course, it will lead to tangible economic loss more so as revenue from oil is no longer stable.

    “It behooves on the government to restructure the tax system such that every legible tax payer will be compelled to pay tax as and when due,” Ede said.

    Commenting, Dr Musa Abubakar, the Acting Chairman of the ICPC, expressed his delight on the signing of the MoU.

    Abubakar said that the CITN was a reliable institution which was uniquely positioned to offer training to ICPC officers in the area of investigating and prosecuting tax evaders.

  • Osinbajo: Africa’s loss to tax evasion triples yearly foreign aid

    Osinbajo: Africa’s loss to tax evasion triples yearly foreign aid

    Vice-President Yemi Osinbajo yesterday said the loss to tax evasion in developing countries, especially in Africa, is three times higher than the money the continent receives in foreign aid yearly.

    Speaking in Abuja at the ongoing African Tax Administrators Forum (ATAF) conference on tax in Africa, Osinbajo cited the Thambo Mbeki report on illicit financial flows which shows great tax losses to African economies.

    The report, according to him, fingers multinationals in practices that lead to tax evasion and tax loss for such countries.

    He also identified domestic resource mobilisation as the greatest challenge in dealing with tax matters in Africa.

    The vice-president said the challenge usually comes in the form of existing tax gap, or the difference between “what we collect and what we could collect”.

    “Significantly also, by the use of aggressive and often suspicious tax planning and transfer mispricing multinationals minimise their tax payments or put more graphically dodge taxes,” he said.

    “The Thambo Mbeki report on illicit financial flows discloses shocking details of tax losses to African economies by these practices of multinationals and their local collaborators.

    “Paradoxically the report shows that these practices lead to an estimated revenue loss for developing countries that is three times greater than the amount they receive in foreign aid each year.

    “However, the trend of the international debate on global tax issues is favourable to African economies and most African tax administrators must be following them closely.

    “There are two main agenda; the first is increasing transparency and information exchange while the second is base erosion and profit-shifting (BEPS).”

    He said the desire to take advantage of the initiatives had informed Nigeria’s launching of the Voluntary Assets & Income Declaration (VAID) scheme.

    “Although the scheme targets local tax evasion, we are also interested in a large number of Nigerians who own property abroad and have not been paying taxes on incomes from these assets.

    “I think it is important to emphasise that almost across Africa, tax administrators are actively engaged in extensive reforms and battling the resource difficulties that hamper those reforms.

    “The issues of cost of collection and the appropriate technologies that could bring down these costs, developing relevant skills and management needed to effectively create and run efficient and transparent tax administrations, issues around institutional structure, the wisdom of ensuring autonomy of institutions of tax administration have stretched the creativity and resourcefulness of tax administrators across the continent, ” Osinbajo said.

  • Tax evasion: FIRS seals Capital Oil, others

    Tax evasion: FIRS seals Capital Oil, others

    The Federal Inland Revenue Service (FIRS) yesterday resumed its enforcement,  shutting down tax-defaulting companies in Lagos and Owerri, Imo State.

    In Lagos, where two FIRS enforcement teams worked in Apapa, the premises of Capital Oil Plc at 28 Creek Road were shut.

    The company’s workers were ordered out of the premises by the team, led by Anita Erinne. The company is owing N30million, which it said it was ready to pay immediately. However, that was not possible because banks had closed. The FIRS team shut the company’s gates.

    Also in  Apapa, the FIRS visited Folawiyo Energy Trading Company on Creek Road. But the company, which the FIRS reckons is owing N450million  in company tax for 2013 to 2015, maintained that it is owing only last year’s. The FIRS team did not seal the company, but advised its management to clear the matter at the FIRS office in Ikoyi.                 Also in Lagos, the FIRS enforcement unit visited the offices  of MAKON Engineering and Technical Services Limited, at 11, Babatunde Anjos Street, Lekki Phase 1.

    However, the team, which was prepared to lock up the company,  changed its mind after the company’s Chief Financial Officer, Lanre Anafi, agreed to pay its N26 million tax debt.

    The team, led by Emeka Obiagwu, FIRS Director of Enforcement, departed the premises after reaching a firm understanding with the company that the debt would be defrayed before the close of work on Monday.

  • Govt seals off 53 hotels for ‘tax evasion’

    Govt seals off 53 hotels for ‘tax evasion’

    The Lagos State Internal Revenue Service (LIRS) has sealed off 53 hotels and eateries for failure to remit about N119.41 million occupancy and consumption taxes.

    LIRS Distrain Unit Head Mrs Ajibike Oshodi-Sholola told the News Agency of Nigeria (NAN) in Lagos yesterday that the exercise was conducted by two enforcement teams.

    Mrs Oshodi-Sholola, who led the enforcement teams, said they sealed off 23 companies for not remitting over N66.07 million; and the 30 others were shut for not paying N53.34million taxes.

    The LIRS official said not up to 70 per cent of hotels and hospitality companies in the state were paying tax.

    “The essence of the three-day consecutive sealing exercise is to ensure that large numbers of the hospitality firms owing occupancy and consumption taxes to the State Government paid their taxes.

    “LIRS has, therefore, resolved to frequently embark on such enforcements until tax payers and corporate organisations in the state imbibed the culture of paying tax voluntarily.’’

    Mrs Oshodi-Sholola said many of the affected hotels that rushed to LIRS offices to pay their taxes during the exercise, had since re-opened.

    She said the hotels that were yet to pay would remain shut until they comply.

  • Panama Papers: Tax evasion hurts anti-poverty fight, says World Bank

    .•IMF urges Nigeria to approve budget, seek economic help 

    Tax evasion through international tax havens and other international illicit transfers of money undermine the fight against global poverty, World Bank President, Jim Yong Kim has said.

    “This is a great, great concern,” Kim said as he opened the Spring Meeting of the World Bank and International Monetary Fund yesterday.

    In a report obtained from the bank’s website, Kim said the global lender is very concerned about illicit financial flows, amid intense attention on the recent leak of Panama Papers’ showing how powerful officials and businesses in many countries make use of thousands of anonymous companies in tax free centres.

    “When taxes are evaded, when state assets are taken and put into these havens, all of these things can have a tremendous negative effect on our mission to end poverty and boost prosperity,” he said.

    The publication early this month of the Panama Papers, a dossier of files on anonymous companies set up by a Panama law firm, has sparked a new push for ending the secrecy offered by tax heavens worldwide, he said.

    He said leaders in developing countries regularly ask him for help in tracking down the exodus of cash whether to avoid taxes or to hide graft.

    He said the one answer is increasing transparency. “The message I would send is that transparency is not going to move backwards. The world is going to become only more and more transparent as we move forward. So, I would just say, be very careful”.

    Meanwhile, the International Monetary Fund (IMF) Managing Director, Christine Lagarde said Nigeria should seek economic help from international institutions.

    Speaking at the IMF conference hall in Washington DC, Lagarde said Nigeria needs to be open-minded on foreign exchange, and swiftly approve the 2016 budget. “Our recommendation is that Nigeria seeks help from the international institutions that can best help,” she told the audience.

    “Second, that Nigeria is open-minded in using flexibility of the exchange rates, in order to absorb some of the shocks. We believe that this is more efficient than to have a list of products that are barred from being imported to the country.

    “Third, we believe that it’s really important that budget be completed, decided and approved and we stand ready to help Nigeria, if it wants to seek our help.”

    “Nigeria is full of energy, smart people, and can really transform some of its activities including the agricultural sector where there is just too much by way of import, when there could be a lot of transformation in Nigeria and local consumption.”