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Published On: Fri, Jul 3rd, 2020

Senate to block illicit financial flows, summons Finance Minister, FIRS, CBN, EFCC, ICPC

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By Musa Adamu

The Senate on Wednesday moved to block Nigeria’s revenue loss through 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 decision to so do was reached in resolutions reached sequel to the consideration of a motion on “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.”
The upper chamber, accordingly, resolved to invite the Minister of Finance, Budget and National Planning, Zainab Ahmed, and the Heads of the Federal Inland Revenue Service (FIRS); Economic and Financial Crimes Commission (EFCC); Central Bank of Nigeria (CBN); and Independent Corrupt Practices Commission (ICPC) 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, and curb tax evasion and money laundering activities.
Also to be invited are the Heads of the Nigerian Financial Intelligence Unit (NFIU); the Nigerian Export-Import Bank (NEXIM); Nigerian National Petroleum Corporation (NNPC) among other relevant institutions.
The upper chamber while mandating the Senate Committees on Finance, Anti-Corruption and Financial Crimes; Banking, Insurance and other Financial Institutions to investigate illicit financial flows, called for an appraisal of the Federal Inland Revenue Service’s (FIRS) current framework for tracing, identifying, preventing and sanctioning Cross-border tax evasion and other illicit financial outflows.
The Senate also mandated the Committee 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 efficient strategy for the reinvestment of repatriated resources into the Nigerian economy.
Sponsor of the motion, Senator Gershom Bassey (PDP – Cross River South), in his presentation, 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 the lawmaker, “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 worry at further findings by the Tax Justice Network and International Monetary Fund, “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 US15billion annually to offshore tax evasion. This has resulted in a consistently 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”, Bassey said.
He added that, “this incessant financial drain on the Nigerian economy continues to have negative implications for domestic resource mobilization and long-term economic growth and development.”

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