Finance

Multinational firms dodge $500bn in corporate tax yearly – Study

Published

5 years ago

May 31, 2019

BY: Sandra Ani

Estimated $500billion in corporate tax is dodged each year globally by multinational corporations in tax havens, a new study, The Corporate Tax Haven Index (CTHI), launched by Tax Justice Network (TJN), claimed on Wednesday.

The CTHI shows an aggressive dispossession of low-income countries’ tax rights spearheaded by the United Arab Emirates (UAE), the United Kingdom (UK) and France.

The affected countries take advantage of minimal, if not non-existent transparency, systemic loopholes and non-implementation of anti-avoidance mechanisms.

Of the 64 countries examined from around the world, nine African countries, namely Botswana, Gambia, Ghana, Kenya, Liberia, Mauritius, Seychelles, South Africa and Tanzania, the CTHI revealed weak tax systems that are constantly exploited resulting in illicit financial flows (IFFs).

The CTHI showed how the United Arab Emirates (UAE) and Mauritius are among the most corrosive corporate tax havens against African countries.

Kenya and Mauritius signed a Double Taxation Avoidance Agreement (DTAA) in May 2012, which Tax Justice Network Africa (TJNA) successfully challenged in the Kenyan high court.

The CTHI’s findings have supported the claims of the High-Level Panel (HLP) on IFFs.

In Nigeria, for example, Chairman, Independent Corrupt Practices and Other Related Offences Commission (ICPC), Prof. Bolaji Owasanoye, said the IFFs are the bane of Nigeria’s growth.

Owasanoye said this at the inaugural meeting of Inter-Agency Committee on Implementation of the Thabo Mbeki Report in Abuja recently.

Mbeki heads African Union’s 10-member High-Level Panel on IFFs. The committee is waging war against illicit financial flows from Africa.

According to Owasanoye, Nigeria is a member of the group.

He said for the country to develop, government agencies must stop money that was going out.

“These monies go out by various measures and the big chunk was by tax evasion, under-hand business and practices by multi-national corporations, among others,” the ICPC Chairman said.

The CTHI reinforces the importance of the Kenya High Court ruling that declared the Kenya-Mauritius treaty null and void by demonstrating the dangers of DTAA signed with tax havens such as Mauritius and UAE in facilitating aggressive tax avoidance, resulting in significant revenue loss for many African countries.

The study reveals the nature of secretive tax havens behind the failure of the global corporate tax system.

CTHI identifies a global network of countries, whose jurisdictions are most responsible for aggressively undermining the ability of governments across the world to meaningfully tax multinational corporations (MNC).

Specific to Africa, the UAE and Mauritius are the continent’s most aggressive countries in terms of driving down the withholding tax rates of countries’ through treaties.

Many African countries are increasingly opening themselves to such exploitation.

For instance, in April 2019 President Uhuru Kenyatta re-signed a DTAA with Mauritius creating a legal conundrum over the treaty, soon after the court ruling invalidated an earlier agreement following TJNA’s petition.

Commenting on the study, the Executive Director of TJNA, Mr. Alvin Mosioma, said: ‘’It is unacceptable that the Kenyan government is shifting the burden of taxation to the ordinary citizen, while deliberately opening doors for the wealthy elite and unscrupulous MNCs to evade and avoid taxes through DTAAs with secretive tax havens.

“As confirmed by the recent IMF study and contrary to popular claims, DTAAs signed by African countries with tax havens do not lead to increased investments.”

Similar to the High Court ruling, this study underscores the position that DTAAs are often abused and provide loopholes for tax avoidance practices taking away revenues these countries direly need to finance their government programmes.

TJNA affirms its demand that the Government of Kenya and other African Governments should review the old and outdated DTAAs, particularly with tax havens, including those with UAE, Netherlands, and Mauritius and ensure that those presently under negotiation do not undermine domestic resource mobilisation efforts.

“Efforts by African countries to address poverty and achieve sustainable development goals will remain a mirage, if these countries do not stem Illicit financial flows and invest in building equitable tax systems,’’ said Mosioma.

The Mbeki panel, in its initial reports, said the IFFs have become a matter of major concern because of the scale and negative impact of such flows on Africa’s growth and governance agenda.

By some estimates, illicit flows from Africa are over $50 billion per annum. This is approximately double the official development assistance (ODA) that Africa receives and, indeed, the estimate may well be short of reality as accurate data does not exist for all transactions and for all African countries.

Some of the effects of illicit financial outflows are the draining of foreign exchange reserves, reduced tax collection, cancelling out of investment inflows and a worsening of poverty.

Such outflows which also undermine the rule of law, stifle trade and worsen macroeconomic conditions are facilitated by some 60 international tax havens and secrecy jurisdictions that enable the creating and operating of millions of disguised corporations, shell companies, anonymous trust accounts, and fake charitable foundations. Other techniques used include money laundering and transfer pricing.

Source: The Nation

Finance

EFCC Chairman Tasks Nigerian Youths Against Crimes And Fraudulent Acts

Published

14 hours ago

May 4, 2024

Alice Ginika Simon

The Chairman of Economic Finance Crime Commission (EFCC), Ola Olukoyede, has stressed the need for Nigerian Youth to see themselves as agents of positive change that have a lot to contribute to the socioeconomic development of the Nation.

Speaking at the 2nd edition of a Leadership Trainings Programme in Abuja, Olukoyede, who was represented by the Head Enlightenment and Re-orientation unit, (EFCC), Aisha Mohammed, said the commission’s dream is to see the youth contribute meaningfully to the society, emphasizing on the need to work together in bringing positive change to society.

The Economic and Financial Crimes Commission Boss declared the readiness of his agency to work with all Stakeholders, including the youth towards changing the narrative and reposition the country to greater exploit.
Also speaking, the representative of the Executive Secretary of Tertiary Education Trust Fund (TETFUND), Sonny Echono, appealed to the youths is to eschew social vices that could deter their full potential in life.

Other speakers at the event, including the Chairperson, Zero Tolerance for Social Immoralities Initiative (ZEITI) Africa, Rasak Jeje called on all stakeholders to join hands in collective pursuit of empowering new generation of leaders to curb the rising tides of social Vice among Nigerian youths.

The Chairperson, Zero Tolerance for Social Immoralities Initiative (ZEITI) Africa, Rasak Jeje made the call while addressing journalists at the 2nd edition of it Leadership Trainings Programme in Abuja on Thursday.
He said the training was aimed to intimate students leaders with knowledge and insights that will help them drive positive change and become exemplary leaders in their respective spheres.

Finance

AISA Has Refunded The Fees Paid By Yahaya Bello To EFCC

Published

1 week ago

April 27, 2024

Alice Ginika Simon

The Economic and Financial Crimes Commission (EFCC) says the American International School Abuja (AISA) has refunded the fees paid by the immediate past governor of Kogi state, Yahaya Bello, for his children attending the school.

In response to a letter addressed to the Lagos zonal commander of the EFCC, the school said $845,852 was paid in tuition “since the 7th of September 2021 to date”.

AISA said the sum to be refunded is $760,910 because it had deducted educational services already rendered.

“Please forward to us an official written request, with the authentic banking details of the EFCC, for the refund of the above-mentioned funds as previously indicated as part of your investigation into the alleged money laundering activities by the Bello family.

Since the 7th September 2021 to date, $845,852.84 (Eight Hundred and Forty-Five Thousand, Eight Hundred and Fifty Two US Dollars and eighty four cents) in tuition and other fees has been deposited into our Bank account.

We have calculated the net amount to be transferred and refunded to the State, after deducting the educational services rendered as $760,910.84. (Seven Hundred and Sixty Thousand, Nine Hundred and Ten US Dollars and Eighty Four cents).

No further additional fees are expected in respect of tuition as the students’ fees have now been settled until they graduate from ASIA.”

In a chat with The Cable, the spokesperson of the EFCC, Dele Oyewale, confirmed that the school has refunded the money.

‘’The money has been paid into public account,” Dele Oyewale was quoted as saying

Finance

Godwin Emefiele Disobeyed Direction Of Law With Intent To Harm The Public, He Printed ₦684.5M Using ₦18.9B Says EFCC in fresh charge

Published

2 weeks ago

April 23, 2024

Alice Ginika Simon

The Economic and Financial Crimes Commission has filed a fresh charge at the High Court of the Federal Capital Territory against the embattled former governor of the Central Bank of Nigeria, Godwin Emefiele.

EFCC in the charge accused Emefiele of approving the printing of N684,590,000 at the rate of N18.96 billion.

EFCC also alleged that Emefiele broke the law with intent to harm the public during his implementation of the naira swap policy of the administration of former President Muhammadu Buhari.

The anti-graft agency also accused Emefiele of unlawfully approving the withdrawal of N124.8 billion from the Consolidated Revenue Fund of the Federation.

EFCC’s top prosecutor, Rotimi Oyedepo, SAN revealed that Emefiele will be arraigned on a new four-count charge before Justice Hamza Muazu

Counts one to four of the charge, read,

“STATEMENT OF OFFENCE: Public Servant disobeying direction of law with intent to cause injury to the public contrary to and punishable under Section 123 of the Penal Code Law, Cap. 89 Laws of the Federation, 1990.

“PARTICULARS OF THE OFFENCE: That you GODWIN IFEANYI EMEFIELE between the 19th day of October 2022 and 5th March 2023 in Abuja, knowingly disobeyed the direction of Section 19 of the CBN Act, 2007, by approving the printing of N375,520,000.00 pieces of colour swapped N1, 000, at the total cost of N11,052, 068,062 without the recommendation of the Board of Central Bank and the strict approval of the President, Federal Republic of Nigeria which conduct of yours caused injury to the public and you thereby committed an offence.”

This and three other charges were stated against him. They read;

“COUNT 2: “That you, GODWIN IFEANYI EMEFIELE, between the 19th of October 2022 and 5th March 2023 in Abuja, knowingly disobeyed the direction of Section 19 of the Central Bank of Nigeria Act, 2007, by approving the printing of 172,000,000 pieces of colour swapped N500 (Five Hundred Naira) Notes, at the total cost of N4, 471,066,040 without the recommendation of the Board of Central Bank and the strict approval of the President, Federal Republic of Nigeria which conduct of yours caused injury to the public and you thereby committed an offence.

“COUNT 3: “That you GODWIN IFEANYI EMEFIELE between the 19th day of October 2022 and 5th March 2023 in Abuja, knowingly disobeyed the direction of Section 19 of the CBN Act, 2007, by approving the printing of 137,070,000 pieces of colour swapped N200 (Two Hundred Naira) Note, at the total cost of N3, 441, 005, 280 without the recommendation of the Board of Central Bank and the strict approval of the President, Federal Republic of Nigeria which conduct of yours caused injury to the public and you thereby committed an offence.”

“COUNT 4: “That you, GODWIN IFEANYI EMEFIELE, on or about the 7th day of October 2020, in Abuja, within the jurisdiction of this Honorable Court, knowingly disobeyed the direction of Section 80 of the Constitution of the Federal Republic of Nigeria, 1999 (As Amended), by approving the withdrawal of the total sum of N124, 860, 227, 865.16 from the Consolidated Revenue Fund of the Federation in a manner not prescribed by the National Assembly, which conduct of yours caused injury to the public and you thereby committed an offence.”