With the red flag up over shrinking income into the Federation Account, losing a whopping $15 billion is certainly not good news for Nigeria, according to the Executive Chairman of Federal Inland Revenue Service (FIRS), Mr Tunde Fowler.
And he is not making a farce about it with the disclosure that the country loses this huge amount annually to tax evasion and the ugly trend must be reversed urgently for the overall good of the economy.
However, Fowler remains optimistic that the hope of checking this huge revenue loss is quite high if Nigeria moves fast to implement the first Automatic Exchange of Information Standard (AEIS) by year 2020.
Addressing a meeting of over 50 tax experts across the globe in Abuja, Fowler said increase in mobility of income and assets has created a challenge for tax administration in various jurisdictions globally.
He told participants at the Forum, organised to chart the course of effectively combating offshore tax evasion through exchange of information regime, that government across the world must step up their joint efforts at addressing existing and emerging challenges in tax administration.
The FIRS boss said current challenges therefore present an opportunity for a coordinated global response to the issues of international tax avoidance, tax evasion, illicit financial flows, money laundering and other harmful tax practices based cooperation and use of advanced technologies to tackle the issues.
He said the AEIS regime is an integral part of Nigeria’s resolve and commitment to improve transparency in tax administration, increased tax revenue collection, and enhance effective and efficient service delivery in the sector.
Fowler noted that there is strong linkage between tax compliance, domestic tax investigation, tax audit, information gathering framework and the international infrastructure for exchange of information amongst authorities and nations.
The FIRS Chairman also explained that; “Nigeria had demonstrated her commitment to improve transparency around tax matters, when she signed a declaration and joined the Multilateral Competent Authority Agreement (MCAA) on Automatic Exchange of Financial Account Information (AEOI) on 17th August 2017.
“Furthermore, to facilitate the process of implementing the Automatic Exchange of Financial Account Information under the Common Reporting Standard (CRS), Nigeria published the AEOI regulations in the Official Gazette of the Federation.”
Additionally, he said success has been recorded in finalising and issuing CRS guidelines; constructing and finishing a dedicated building for the operations of the AEOI; and putting in place the necessary Information and Communication Technology (ICT) infrastructure to operationalise the AEOI processes.
Fowler said; “Nigeria has done all these to enable us conduct the first exchange of information under the automatic exchange of information regime by September 2020.”
In his goodwill message, the Executive Secretary, West Africa Tax Administration Forum (WATAF), Mr Babatunde Oladapo, said the body was committed to efforts at expanding the global tax base through exchange of information.
He said measures are on the table to close the gap among nations towards ensuring effective implementation of information exchange, noting that tax administration would only thrive successful when information is available