Participants Call for National Dialogue on Tax System

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By Alex Ekemenah

Lagos, Nigeria – Stakeholders have called for a national dialogue to address all the discrepancies observed in the nation’s tax system as this will help to curb illicit financial flows out of the country through the private sector.

The call was made at the Policy Dialogue on Illicit Financial Flows in the Private Sector in Nigeria organized by the Civil Society Legislative Advocacy Centre (CISLAC) held at R & A City Hotel, Ikeja, Lagos, recently.

While participants noted and agreed that illicit financial flow is a global phenomenon, they also agreed that the phenomenon has become more pervasive in Nigeria because of the several loopholes and weak nature of the nation’s tax system.

It is noted that about N850 billion (conservative estimate) is lost annually through various mechanisms such as incentives to multinational corporations. About $5.8 billion is lost collectively by Nigeria, Ghana and Senegal every year because of their weak tax system.

The role of the media and active citizenship was highlighted. It was noted that media practitioners need to be well paid to enable it report objectively and courageously on what are perceived to be wrong with our socioeconomic system and society in general.

Towards this goal, the media is advised to desist from all sorts of hero worshipping of individuals who are perceived to be exploiting the weak tax system in the country to their advantages.

Media practitioners are also advised to use the Freedom of Information Act as both an instrument and channel to secure information on any issue from government parastatals, institutions or individual government officials.

However, it is also noted that using FOI to secure information can be very difficult, often ending in courts to compel government institutions and officials to release information requested by corporate bodies, media, and individual citizens.

Participants are worried that not much is known about how much of tax revenue goes into annual budget cycles since the budget is primarily based on revenue from oil sales. It is not also known how much of tax revenue translate into development projects that directly impact the lives of the citizens. In other words, people are paying taxes without knowing the specific projects to which the tax revenue has been targeted.

On a presentation titled “Wages, CSR and Tax in Nigeria, participants critically examined the tax policy, legislation and administration and noted the gaps that exist between the different layers.

Participants noted that big corporations in the country are now establishing foundations. Participants x-rayed this growing phenomenon and noted that it is not only being used to avoid paying taxes but it is a secret mechanism for laundering money.

Participants called for vigilance of the citizens and the relevant law enforcement agencies in monitoring the activities of the numerous foundations that are now springing up everywhere.

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