Alarm as 7,000 billionaires evade taxation in Nigeria

Nigerian President Muhammadu Buhari. FILE | AFP PHOTO 

By MOHAMMED MOMOH

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Summary

• Tax experts are demanding stricter punishment for defaulters, claiming they were largely to blame for Nigeria’s external debt of more than $33 billion
• The experts expressed the sentiments after the Federal Inland Revenue (FIRS) revealed that close to 7,000 billionaires in Nigeria had defaulted from paying tax.
• FIRS said it would soon go after the bank accounts of the defaulters.
• Speaking in Abuja, the tax experts called for a probe on politicians who were spending millions of naira to secure party nominations for next year's General Election.

Tax experts are demanding stricter punishment for defaulters, claiming they were largely to blame for Nigeria’s external debt of more than $33 billion

The experts expressed the sentiments after the Federal Inland Revenue (FIRS) revealed that close to 7,000 billionaires in Nigeria had defaulted from paying tax.

FIRS said it would soon go after the bank accounts of the defaulters.

Speaking in Abuja, the tax experts called for a probe on politicians who were spending millions of naira to secure party nominations for next year's General Election.

“There is a need for stricter punishment on tax evaders in the country,’’ Prof Sheriffdeen Tella, a Senior Economist at the Olabisi Onabanjo University in Ogun State, said.

“Tax evaders are sent to jail in other countries.’’

The economist insisted that FIRS should probe the tax records of politicians who were spending a fortune to collect forms for their party primaries.

Mr Seyi Alade, the Lagos State Internal Revenue Service (LIRS) legal director, also attributed incessant evasion to non-prioritisation of taxation by the Federal Government.

He pointed out that for more than 6,772 billionaire accounts to have evaded tax, meant less revenue to the government to fund critical services.

Mrs Oso Afolake, the Assistant Director of the Chartered Institute of Taxation of Nigeria (CITN), blamed the rampant tax evasion on weak system, which she said could be fixed by the government.

“Tax evasion results to reduction in revenue and this will deprive government the resources to perform its statutory duties," she said.

The president of the International Centre for Tax Research and Development, Mrs Morenike Babington-Ashaye, urged the government to nurture Nigerians’ attitude towards voluntary compliance to tax law.

Mrs Babington-Ashaye also argued that using the banks to go after defaulting taxpayers was not a legitimate process.

The CITN founding member described the FIRS’s process of asking the banks to seize money as ‘going to the back door’.

That, she said, might lead to customers not saving their money in the banks, thereby reducing their resources for operation.

PwC West Africa Tax Leader Taiwo Oyedele argued that all taxation measures should be in accordance with the law to avoid negative impacts on businesses.

Another tax expert, Mr Kunle Quadri, said paying taxes was one of the most effective means for the redistribution of wealth.

Mr Quadri, a former president of the West Africa Institute of Taxation, said that paying of taxes at all levels was one of the most responsible deeds, and also sacrosanct to ensure that government meets it obligations.

“We needs to pay our taxes as it is one of the most patriotic deeds and enables government to meet its own part of the bargain to the electorate," he said.