May 16, 2021

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AfricaTopForum – News Around Africa

FIRS alert!

3 min read
estate

Editorial

Were the report credited to the Federal Inland Revenue Service (FIRS) Executive Chairman, Muhammad Nami, that Nigeria may have lost about $178billion (about N5.4 trillion) to tax evasion by multi-nationals in 10 years be true in any particular, Nigerians would be left to wonder about the place and the import of the much acclaimed extensive reforms and no less the fundamental transformation of the federal tax/revenue agency – the FIRS in the decade under reference. Even on this, we can only assume that the claims by the FIRS helmsman are no red herring, particularly when he referenced a 2014 report by the High-Level Panel on Illicit Financial Flows from Africa, in which Nigeria was said to account for 30.5% of money lost by the continent through illicit financial flows, subsequent to which he reportedly made the claim that “many rich multinational corporations do not pay the right taxes due from them, let alone pay their taxes voluntarily”.

To begin with, we note that the FIRS helmsman said nothing new about the penchant by the multinational companies to take advantage of our lax tax systems to evade payment; same with the criminal collusions under which such practices are made possible. Such weaknesses as indeed loopholes are to be found in virtually all tax jurisdictions.

However, whereas most Nigerians are readily familiar with the corruption factor and how this inhibits an efficient and effective administration of our tax system, it is also their understanding that the reforms – particularly the massive investment in capability-building and the unprecedented deployment of IT infrastructure witnessed since 2004 when the reform started – were such that ought to have banished such massive financial malfeasances into history.

The opposite is what Nami appears to suggest.

At this time, we have no basis to disagree with the FIRS helmsman. The revelation might in fact be merely a tip of the iceberg. Seen from the perspective of the perennial gaps in the funding of successive budgets, the situation, if true, would be grave as to be deemed as most intolerable.

It therefore goes without saying that the claim, which allegedly, happened under the watch of previous leadership of the service, should not be taken lightly, and so must be investigated. Here, if we understood what the FIRS boss appears to suggest, it is either that the agency was either largely derelict in the performance of its essential duty during the period, or so utterly constrained by the terrible vices of corruption in its ranks for its own good. As it is, none of the situations could be said to be flattering to the body.

Whichever way, the FIRS boss owes Nigerians the public duty of shedding more light on the extent of the criminal malfeasance to enable Nigerians see the issue properly as it is. That should enable interested agencies of government to undertake possible inquiry for possible corrective measures wherever necessary. In other words, it should not be another instance of the penchant by public officers to make claims which in the end are mere wild conjectures which are more often than not, unsupported by hard facts.

Finally, we see the issue as offering FIRS a fresh opportunity to undertake a thorough evaluation of its own operations. Are there still capacity gaps deserving swift remediation? What of the state of its infrastructure; are these adequate given the complexities of their tasks, particularly now that the agency’s role has become extremely critical to the ability of the Federal Government to deliver on the budget?

And the issues of corruption and collusion among its personnel vis-à-vis their clients; how are these being addressed? These issues, by no means exhaustive, are no doubt deserving of attention, particularly at this time.