FIRS Lists Multinational Companies, Others as Enablers of Illicit Financial Flows

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By Kingsley Nwezeh

At a virtual conference hosted by the Independent Corruption and Other Related Offences Commission (ICPC), and the Federal Inland Revenue Service (FIRS) yesterday declared that multinational companies, banks and oil and gas companies are the biggest enablers of Illicit Financial Flows (IFF) and money laundering.

It said corruption and abuse of office by political appointees and civil servants also facilitate money laundering, terrorism financing and tax crimes.

Speaking at the virtual meeting to “Review the Report on Illicit Financial Flows in Relation to Tax”, FIRS Chairman, Mr. Muhammed Nami, said the service was striving to contain money laundering, terrorism financing and illicit flow of money from Nigeria in view of their negative impact on the economy.

He called for stiffer laws and regulations to be enacted to deter future illicit financial inflows by people determined to engage in such acts especially with the new trend of virtual currencies which he described as ‘’a new typology on illicit financial flows.’’

The FIRS boss maintained that FIRS was implementing various strategies to curb IFF activities.

He affirmed that the service wrote to all commercial banks in May 2018, requesting for a list of companies, partnerships, and enterprises with N1 billion banking turnover.

He said 23 banks responded with a list of 18,602 enterprises, noting that 11, 830 companies were found to be paying some type of taxes while 6,722 were not paying taxes.

He stated that as at September 2019, N37.327billion was recovered from defaulting tax payers while action would be enforced against 4,500 companies.

Nami said the nature of tax fraud, IFFs and tax crimes include “payments of expatriates staff emoluments and remuneration and failure to declare for personal income tax purposes such emoluments to the relevant tax authorities in Nigeria; laundering of funds (often sourced illegally) through real estates’ transactions to acquire property in choice locations outside Nigeria; illegal transfer of money out of the country via unapproved channels, (virtual currencies); mispricing of goods and services transferred between interrelated Nigeria- based companies and individuals to offshore- based entities and individuals; profit-shifting and mis-invoicing of imports and exports”

He disclosed that “unwholesome practices of multinational enterprises, financial institutions, and oil and gas companies remained the biggest component of IFF in Nigeria.

Earlier in his remarks, the ICPC Chairman, Professor Bolaji Owasanoye, (SAN), said it was imperative that the meeting addressed ways to effectively curb illicit financial flows through risk-based approach to monitoring and audit, due process in tax collection, structured tax amnesty framework, especially the ones skewed against public interest, and data privacy.

The ICPC boss sought timely resolution of audits and payment of tax refunds and intelligence sharing among revenue generating, regulatory and law enforcement agencies. “We must recognise the rapidly changing world and the need to be on top of our game as a nation,” he said.