By Kunle Aderinokun and Obinna Chima in Bali, Indonesia
The Minister of Finance, Mrs. Zainab Ahmed has appealed to the International Monetary Fund (IMF), and the G24 to assist the federal government in identifying the assets of Nigerians overseas and of international companies doing business in the country for proper inventory, for the purpose of effective taxation.
Ahmed made the request, yesterday, at a closed-door G24 meeting, which took place on the sidelines of the ongoing IMF/World Bank Annual Meetings in Bali, Indonesia.
The minister said the G24 meeting, which was co-chaired by the Vice President of the World Bank and the Deputy Managing Director of the International Monetary Fund (IMF), “was for us to ask questions and for them to respond to how they can better assist us. So, what we asked was how they can help us to fashion out instruments that can help us pursue taxes, especially from very large corporates like international oil companies (IOCs).
Ahmed said the federal government was assiduously working towards fashioning out strategies that would help improve the country’s tax revenues, especially from the International Oil Companies (IOCs).
According to her, “Our greatest tax potential is from the IOCs that operate in the oil and gas sector. Yes, this is the industry that, from the Thabo Mbeki Report, shows that about 70 per cent of the illicit financial flows that go out of Africa, including Nigeria, is related to the extractive industry.
“So, we did ask for how we can effect transfer pricing and how we can stop the flows from that sector. That is because these are revenues that are needed to enhance development,” she explained.
President Muhammadu Buhari had, on Monday in Abuja, signed executive order eight, tagged Voluntary Offshore Assets Regularisation Scheme (VOARS) to make money laundering and tax evasion difficult. The Executive Order 008 has become effective.
According to the president, by the order, Nigerian taxpayers, who hold offshore assets and incomes are expected to, within a period of 12 months, voluntarily declare those assets and pay required taxes from such assets.
When this is done, he added, such obedient citizens would derive certain specified benefits.
“Any taxpayer who truthfully and voluntarily complies with the conditions of the scheme, pays a one-time levy of 35 per cent on the total offshore assets or pays all outstanding taxes, penalties and interest after forensic audit of their offshore assets and income shall obtain immunity from prosecution for tax offenses and offences related to offshore assets, among others.”
Continuing, the finance minister also disclosed that the Nigerian delegation had a meeting with investors from different part of the world and, “all we told them is the Nigerian story, making it clear to them that Nigeria is a good place to do business and that the returns you get from Nigeria are high, at about 14 per cent, as against about four per cent in the United States.”
She expressed optimism that the planned $2.79 billion Eurobond would have a positive outcome.
“In Nigeria, we have had a policy of diversifying the economy away from oil for a very long time and the Buhari administration is vigorously pursuing that. The evidence of that is seen in the last GDP report for the second quarter that was released recently where the non-oil sector grew by 2.05 per cent, compared with the oil sector that had a negative growth of four per cent. That is evidence that the non-oil sector is growing, service sector is growing and the manufacturing is growing,” she added.
Ahmed assured Nigerians that the federal government would work on improving on its disaster management process.
According to her, one of the issues that were discussed at the meeting was on the need for countries to be prepared to be able to act very quickly during period of disaster.
“Also, we have to be ready to provide support to our neighbours and other countries that have such disasters. We are lucky in Nigeria that we haven’t had extremely devastating natural disasters. If you look at what happened to Indonesia recently, a lot of lives were lost, as well as a lot of properties. What we are discussing is how we should be ready, because these are things that are not within our control. So, we should be ready to respond as quickly as possible to minimise the damage that has happened,” she said.