The Federal Government has revealed that Nigeria loses approximately $18 billion annually due to profit shifting and tax avoidance practices by multinational corporations operating in the country.
This alarming disclosure was made by the Minister of State for Finance, Dr. Doris Uzoka-Anite, during her address at the National Conference on Illicit Financial Flows organized by the Federal Inland Revenue Service (FIRS) on Tuesday.
The minister described illicit financial flows as a "hidden pipe draining the country's national wealth" and emphasized that these practices severely undermine revenue generation, consequently hampering the government's ability to provide critical infrastructure for citizens.
"Illicit financial flows are not just technical problems but political, and developmental problems. It is also a national security concern. Illicit financial flow is a monster that must be eradicated," Dr. Uzoka-Anite stated.
She further revealed that substantial amounts of money are routinely transferred out of Nigeria, effectively "stripping the country of the resources needed to finance much-needed public services."
Renewed Hope Agenda and Economic Reforms
The minister highlighted that under President Bola Tinubu's Renewed Hope agenda, Nigeria is implementing peaceful reforms aimed at building a resilient and self-reliant economy driven by revenue rather than debt.
"For decades, Nigeria has relied on oil revenue and this is volatile and very unsustainable. The current reforms recognize the urgent need to diversify the revenue base, shifting focus from oil to non-oil sources," she explained.
Earlier at the conference, FIRS Executive Chairman Zacch Adelabu Adedeji emphasized the urgent need to safeguard the country's national resources and "build a resilient and equitable future," while lamenting the negative impacts of illicit financial flows on the nation's economy.
FIRS Strategic Response
Adedeji expressed confidence that under President Tinubu's administration, Nigeria is entering "a new era of fiscal reform." He noted that the recent assent to four tax reform bills "signals this administration's strong commitment to overhauling our tax system, organizing the legal administration, legal framework and institutionalized transparency in revenue collection."
The FIRS chairman outlined the agency's multidimensional strategies to combat illicit financial flows, stating, "Our goal is to forestall a culture where compliance is driven by trust and not by fear. We are building a tax system that is proactive, smart and secure."
He added that while legal reform is only a starting point, the FIRS is committed to reinforcing enforcement, optimizing digital compliance, and building public trust through fairness, predictability, and strategic communication.
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