Nigeria loses $2.9bn yearly to tax waivers amid VAT hike, CISLAC alleges

Civil Society Legislative Advocacy Centre has alleged that Nigeria loses about $2.9bn yearly to tax waivers granted to multinational companies.

The Executive Director, CISLAC and Transparency International Nigeria, Auwal Rafsanjani, disclosed this in Abuja on Tuesday at the pan-African conference on combating Illicit Financial Flows to bridge Africa’s widening inequality gap.

CISLAC also revealed that Africa lost in excess of $1tn in illicit financial flows over the last 50 years, with a yearly loss of $50bn.

Rafsanjani regretted that despite the huge loss to tax waivers, the government unjustly increased Value-Added Taxes from five per cent to 7.5 per cent, which he said affected the poor more.

Noting the widening inequality gap in West Africa, fuelled by the Coronavirus Disease, Rafsanjani said Nigeria was the region’s worst performing country in tackling inequality going into the pandemic.

According to him, IFFs connected with corruption, crime and tax evasion are an issue of increasing concern that reduces government’s revenue for financing sustainable development.

He said: “International Monetary Fund and World Bank have all expressed concerns over the likely sharp increase in inequality and poverty arising from the pandemic, with estimates projecting that 42.1 per cent of the sub-region will be pushed into extreme poverty.

“Worse yet, the World Bank further indicated that the poverty increase could take more than a decade to reverse, erasing all hopes of countries meeting their national development targets to reduce poverty and inequality by 2030. On the other hand, the wealthiest people in the region fare differently, as the three wealthiest men in the region, who are all based in Nigeria, have seen their wealth expand from $16.8bn in March 2020 to $23.2bn by July 2021, which is more than enough to fund a full vaccine programme for the entire West African population.”

He stated that the amount lost to IFFs in Africa was roughly equivalent to all the Official Development Assistance received by Africa during the same time.

The Registrar-General, Corporate Affairs Commission, Garba Abubakar, observed that the Pandora Papers and other exposes of how prominent politicians and public personalities revealed the concern about poverty, inequality, lack of infrastructure and good governance had not been fully addressed.

He however, maintained that the emergence of a legal framework and the deployment of an electronic register of beneficial owners of registered entities demonstrated the political will and commitment of government to fight corruption and address the emerging issues associated with it.

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