Nigeria ‘loses $2.9bn to tax incentives’

Tunde Aremu, campaign manager of Action Aid, a non-governmental organisation (NGO), says tax incentives to multinational companies cost Nigeria about $2.9 billion on an annual basis.

Aremu said this in Abuja on Thursday during a visit to Odeneye Kehinde, the lawmaker representing Ijebu Central constituency in the house of representatives.

He said there was need for the national assembly to review the laws that granted incentives to the multinational companies, advising the legislature to probe the processes of granting the tax incentives.

“How are these incentives negotiated? Our suspicion is that the processes of negotiating these incentives are not open,” he said.

“The companies go under the rugs to negotiate these incentives

“The Nigerian parliament should start querying the processes and demand that they should be open and transparent and that the representatives of the people should be informed when these incentives are being negotiated.”

Aremu said although that tax avoidances were legal, “they are actually legal means of stealing money”.

He described e-trading, over invoicing, mispricing and price shifting as some of the technical terms adopted by the companies to encourage illicit financial flow from the country.

“The bulk of the money leaving Africa that we are losing contrary to impression, is not due to corruption, crime, drug trade or trade in human trafficking or other crimes

“Over 75 per cent of the money leaving Africa illicitly is actually through tax avoidance practices which unfortunately is not regarded as illegal.”

He urged the legislature to demand for the audit of the incentives in order to check the abuse of the process.