No room for tax avoidance, evasion, NFIU warns

The Nigerian Financial Intelligence Unit (NFIU) has called for an efficient taxation system to ensure an equitable share of the tax burden.

The NFIU’s Chief Executive Officer, Hafsa Bakari, made the call during the Revenue Assurance Summit the agency organised in Abuja on Tuesday.

Ms Bakari emphasised that for the government to be able to provide adequate infrastructure and basic amenities, “There can be no room for tax avoidance and tax evasion.”

She added that the Unit’s focus had shifted towards increasing internally generated revenue, noting that it would enable the government to secure and provide essential amenities for citizens.

“To build the schools we need, to educate our children, to provide effective healthcare, to build roads and bridges, to secure our communities, we recognise that our focus should shift towards internally generated revenue,” Ms Bakari added.

Achieving tax efficiency that ensures fair distribution of tax burden and using tax revenues to address socio-economic challenges of citizens has been a concerning issue in Nigeria.

At a separate event in Abuja on Tuesday, Oxfam Nigeria and the Civil Society Legislative Advocacy Centre (CISLAC) similarly called for urgent tax reforms in Nigeria to tackle the rising economic inequality that has pushed millions into poverty.

The civil society organisations made the call at the unveiling of Oxfam’s report, titled, ‘Income and Wealth Inequality in Nigeria: Trends and Drivers’.

According to the report, about 133 million Nigerians, nearly 70 per cent of the population, are facing hunger, with women and girls disproportionately affected.

It added that 99 per cent of Nigeria’s wealthiest citizens evade taxes, while only 40 of the country’s top earners are compliant taxpayers. This small group represents just 0.035 per cent of the wealthiest individuals, highlighting the system’s failure to ensure fair contributions from the rich.

Tax evasion, other tax crimes

Ms Bakari said at the NFIU’s Revenue Assurance Summit on Tuesday that, although the organisation’s mandate initially focused on money laundering and terrorism financing, it has identified tax crimes and revenue assurance as a critical strategic priority.

She said, “Historically, FIUs have focused on money laundering and terrorist financing. However, at the NFIU, we have identified tax crimes and revenue assurance as a critical strategic priority for the Unit.

“This led us to establish a dedicated Tax Crimes and Revenue Assurance Department, one of the first within any Financial Intelligence Unit globally.”

The NFIU boss noted that while the Unit’s work on tax crimes initially focused on supporting the Federal Inland Revenue Service, it has taken a further step to explore partnerships with sub-national counterparts.

She added that the expansion was predicated on the recognition that the vast majority of tax evasion happens at the state level.

“Our analysis led us to the conclusion that the data on financial transactions held within the unit would be of tremendous benefit to State Internal Revenue Services as well,” she said.

Ms Bakari, however, charged revenue services of upholding international conventions and standards to protect the integrity of the information that would be provided to them.

‘Taxpayers are mostly the poor’

Also speaking at the event, the Chairman, Presidential Committee on Fiscal Policy and Tax Reform, Taiwo Oyedele, echoed the concerns shared by tax justice advocates that “those who have been paying taxes are mostly the poorest”.

“So, to protect these people, give them exemption and then allow those who can pay to start paying and that is where the money will come from,” said Mr Oyedele while fielding questions from journalists on the sideline of the NFIU’s Revenue Assurance Summit on Tuesday.

He added that “it is in our enlightened self-interest for the elite and the upper middle class to pay taxes, because when they pay they will not have to incur implicit taxes of running their own local government in their own houses which is more expensive.”

He also advised that the federal, states, and local governments must collaborate efforts, especially in the area of data and capacity.

He stressed the need for effective and reliable data collection to enable all tiers of government to ramp up revenue as quickly as possible.

“Nigeria is no longer at a point where we will be celebrating revenue for this year as raised from 12 per cent over last year. We can’t start from a low base and be celebrating incremental progress, we need a leap, we need transformation,” he said.

‘Nigeria not broke’

He also maintained that Nigeria is not broke as being insinuated in some quarters, but only has the challenge of revenue leakages.

He, however, pointed out that there are efforts to address the challenges, which, he said, motivated the organising of the summit.

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“I would not say Nigeria is broke, I will say we have revenue leakages,” he said while fielding questions from journalists.

He queried the inefficiencies of Nigeria’s revenue collection process, adding that Nigeria has government assets, government enterprises, and natural resources which are beyond oil and gas to solid minerals.

The tax expert said efforts are being made to optimise the country’s revenue.