Senate Summons Finance Minister, EFCC Boss, Others over Revenue Leakages

The Senate on Wednesday summoned the Minister of Finance, Budget and National Planning, Zainab Ahmed; Governor of Central Bank of Nigeria (CBN), Godwin Emeifele; acting Chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Melee Kyari, to appear before it over revenue lost annually to tax evasion and money laundering activities in the country. This was sequel to the adoption of a motion entitled: ‘The need to review the domestic framework against illicit financial flows and to consider the creation of a tax amnesty for the voluntary repatriation of funds to Nigeria’, which was sponsored by Senator Gershom Bassey. Also invited are Heads of the Federal Inland Revenue Service (FIRS); Independent Corrupt Practices Commission (ICPC); Nigerian Financial Intelligence Unit (NFIU); the Nigerian Export-Import Bank (NEXIM), among other relevant institutions, which are expected to brief the Senate Committees on Finance, Anti-Corruption and Financial Crimes; Banking, Insurance and other Financial Institutions on measures being sought to curb revenue loss, tax evasion and money laundering activities. The Senate, while mandating its three committees to investigate illicit financial flows, also called for an appraisal of the FIRS current framework for tracing, identifying, preventing and sanctioning cross-border tax evasion and other illicit financial outflows. It also moved to block Nigeria’s revenue loss owing to money laundering, tax evasion by international oil companies operating in the country (IOCs), proceeds of corruption and other criminal activities involving illicit financial flows. The Senate further mandated its Committees to come up with a holistic legislative framework on how to repatriate lost revenue due to illicit financial flows, mitigate such future unabated flows and provide an efficiency strategy for the reinvestment of repatriated resources into the Nigerian economy. Moving the motion, Senator Bassey, while citing a 2014 Global Financial Integrity Report, said: “Nigeria lost a minimum of US$140 billion to illicit financial flows between 2000 and 2014 mainly to crude oil and commercial activities mis-pricing.” According to him, “This economic loss to the country was not abated as Nigeria was ranked among the global top 30 countries of illicit financial outflows by dollar value with US$8.3 billion in illicit outflow from Nigeria in 2015.” Bassey expressed concern at further findings by the Tax Justice Network and International Monetary Fund (IMF) “that developing countries, including Nigeria, have lost over US$200 billion per year to illicit financial flows as multinational corporations neglect, fail and/or refuse to pay taxes in these countries where they generate substantial amounts of profit. “Nigeria loses approximately US$15billion annually to offshore tax evasion. This has resulted in a consistent low tax revenue as a percentage of Gross Domestic Product (GDP), as low as 5.7 percent in 2017. Such statistics are alarming, especially when compared to the 17.2 percent average of 26 African countries in the same year.” The senator added that “this incessant financial drain on the Nigerian economy continues to have negative implications for domestic resource mobilisation and long-term economic growth and development. “IFFs continue to pose serious obstacles to development, as approximately five percent of the IFFs from Africa can be attributed to corruption, while 95 percent of IFFs come from commercial and criminal activities. These unrecorded and untaxed cross-border transfers could have been mobilised as part of government revenue and injected into Nigeria’s formal economy towards sustained development and economic growth.” Bassey further expressed concern that “statistics has shown that the amount of revenue lost annually by Nigeria is more than the sums provided as development aid.” The lawmaker added that global awareness has prompted governments across the world to develop measures and policies aimed at eradicating the perpetuation of illicit financial flows (IFFs) such as the Organisation for Economic Co-operation and Development (OECD) Common Reporting Standard (CRS).