The Senate, yesterday, initiated moves to establish a holistic legislative framework to support repatriation of lost revenue due to illicit financial flows and also provide an efficient strategy for the re-investment of the funds into the economy.
Gershom Bassey, sponsor of the motion, tagged: “The need to review the domestic legal framework against illicit financial flows and to consider the creation of a tax amnesty for the voluntary repatriation of funds to Nigeria,” drew attention to how the nation’s economy and socio-economic development have suffered from unabated cross-border financial draining of revenue by illicit financial flows, arguing that there was the need to halt the graft.
In his lead debate, he cited a 2014 Global Financial Integrity Report, which claimed that Nigeria lost a minimum of $140 billion between 2000 and 2014 due to crude oil and commercial activities mispricing.
“This enormous economic loss to the country has not abated, as Nigeria was ranked among the global top 30 countries of illicit financial outflows by dollar value, with $8.3 billion in illicit financial outflow from Nigeria in 2015. The Tax Justice Network and the International Monetary Fund estimated that developing countries, including Nigeria, have lost over $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 $15 billion annually to offshore tax evasion. This has resulted in a consistently low tax revenue as a percentage of GDP, as low as 5.7 per cent in 2017. Such statistics are alarming, especially when compared to the 17.2 per cent average of 26 African countries in the same year,” Bassey said.
He said, based on available statistics, the amount lost annually was more than the sums provided as development aid.
Based on his submissions, the Senate mandated the Committees on Finance, Anti-Corruption and Financial Crimes, Banking, Insurance and other Financial Institutions to investigate the phenomenon of illicit financial flows.
The committees are also expected to appraise the Federal Government’s current policy framework to curb the continuous loss of Nigeria’s revenue to illicit financial flows.
The Senate Committees on Finance, National Planning, Anti-Corruption and Financial Crimes, Banking, Insurance and other Financial Institutions are also expected to appraise the Federal Inland Revenue Service’s current framework for tracing, identifying, preventing and sanctioning cross-border tax evasion and other illicit financial outflows.
The Red Chamber has summoned the minister of finance and the executive heads of the Federal Inland Revenue Service, Economic and Financial Crimes Commission, Central Bank of Nigeria, Independent Corrupt Practices Commission, Nigerian Financial Intelligence Unit, Nigerian Export-Import Bank, Nigerian National Petroleum Corporation and any other relevant institution to address the committees on the continuous loss of government revenue to illicit financial flows and to present reports on measures to curb revenue losses.