Nigeria’s Vice President, Yemi Osinbajo, has said tax evasion and tax avoidance account for up to 65 per cent of illicit financial flows.
Osinbajo said on Monday at a virtual launch of a publication by the United Nations Conference on Trade and Development on the impact of illicit financial flows on African development.
In a statement by his media aide, Laolu Akande, Osinbajo said, “The commercial form of illicit financial flows especially tax evasion and aggressive tax avoidance accounts for up to 65 per cent of illicit financial flows.
“This means that we must pay particular attention to these issues which are aided by things such as tax treaties, tax havens, and financial secrecy jurisdictions and indeed tax competition which leads to a ‘race to the bottom’ in terms of tax rates amongst developing countries.”
Osinbajo pointed out that for an effective reform to be carried out, there was a need for leaders of destination countries of illicit funds and their proceeds to demonstrate the will to tackle the menace.
He said, “Another important issue that we must pay attention to is the identification and return of proceeds of illicit financial flows back to countries of origin as an effective deterrent to the scourge of illicit financial flows.
“Certainly, exposing those involved in practices that facilitate illicit financial flows, and retrieving proceeds of illicit funds are efficacious in deterring perpetrators, rebuilding the confidence of the citizenry, and compensating for the damage caused by such crimes.”
He added, “I encourage all leaders, whose countries are considered absolute outliers for illicit financial flows, to join forces and take the responsibility of combating the scourge by insisting on the repatriation of illicit funds and their proceeds.”
The vice president stated that cooperation and synergy among the private sector, civil society, trade unions and professional groups would also help governments in tackling illicit financial flows.
He explained, “The private sector must support our efforts by adhering to international best practices in their operations and by ensuring that their tax and trade practices comply with local laws while professional bodies, including those for lawyers, accountants, auditors, and bankers must observe ethical professional standards and hold their members to account if they abet tax evasion and aggressive tax avoidance.”
However, Osinbajo called on the United Nations to facilitate the establishment of clear rules and enforcement mechanisms on all aspects of illicit financial flows.
