Finance

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

Published

6 years ago

May 31, 2019

grassroots

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

Tinubu Launches Personal Income Tax Calculator to Improve Compliance, Fairness

By ORJI ISRAEL

Published

7 days ago

August 22, 2025

grassroots

President Bola Tinubu

President Bola Tinubu has launched a Personal Income Tax Calculator to help Nigerians work out their tax obligations under the new tax law.

The tool is expected to make compliance easier and improve transparency in the system.

In a post on his X page, the president said the calculator shows how the recent reforms protect low-income earners while ensuring fairness.

“A fair tax system must never punish poverty or weigh down the most vulnerable. With the new tax laws I recently signed, taking effect from January 2026, we have lifted this burden and created a path of equity, fairness, and true redistribution in our economy,” Tinubu said.

Some months ago, he signed four major tax bills into law to bring Nigeria’s scattered tax system under one framework. These include the Nigeria Tax Administration Law, which sets out a uniform process for tax administration across federal, state, and local governments; the Nigeria Revenue Service (Establishment) Bill, which replaces the current Federal Inland Revenue Service Act with a stronger, more independent revenue agency; and the Nigeria Revenue Service (NRS) and Joint Revenue Board (Establishment) Bill, which creates a formal structure for cooperation between revenue bodies at all levels.

The introduction of the tax calculator, together with these reforms, is expected to reduce confusion for both individuals and businesses, while also making it easier for them to meet their obligations and contribute to national growth.

Tinubu added that the reforms are part of building renewed hope for the economy and urged Nigerians to trust in the country’s future for themselves and their families.

Finance

FIRS e-Invoicing Hits 20% Adoption in Two Weeks

Reporter: SANDRA ANI

Published

3 weeks ago

August 11, 2025

grassroots

The Federal Inland Revenue Service (FIRS) says that no fewer than 1,000 companies, representing 20% of total eligible firms, have begun integrating its newly launched electronic invoicing (e-invoicing) system less than two weeks after it went live.

The FIRS e-invoicing platform, which went live on August 1, 2025, after a successful pilot phase that began in November 2024, was designed to modernise Nigeria’s tax administration, curb evasion, and enhance transparency in revenue generation. It also provides the FIRS with real-time visibility into commercial transactions, ensuring authenticity and completeness of invoices.

According to a statement by Dare Adekanmbi, special adviser on Media to FIRS Chairman Zacch Adedeji, at least 1,000 companies, representing 20% of more than 5,000 eligible firms, have already adopted the system and begun integrating with the FIRS platform.

Adekanmbi noted that the initiative, also known as the Merchant-Buyer Model, will be rolled out in phases. “Large taxpayers, which are companies with annual turnover of N5 billion and more, are expected to be the first to be onboarded on the platform,” he said.

FIRS revealed that MTN Nigeria was the first taxpayer to transmit live electronic invoices to the platform, while Huawei Nigeria and IHS Nigeria have concluded test transmissions and are expected to go live soon.

The agency added that the initial compliance deadline of August 1, 2025, has been extended by three months to accommodate companies currently facing onboarding challenges. The new deadline is now November 1, 2025.

Finance

NGX Boss, Umaru Kwairanga, to Chair Business Journal Fintech Roundtable 2025

By Our Correspondent

Published

4 weeks ago

July 31, 2025

grassroots

NGX Boss, Umaru Kwairanga

Dr. Umaru Kwairanga, Group Chairman, Nigerian Exchange Group (NGX) will Chair the 2nd Business Journal Fintech & Financial Inclusion Roundtable 2025 scheduled for Friday, August 29, 2025 at Oriental Hotel, Lekki, Lagos. Time is 10-am prompt.

The theme of the Roundtable is: Fintech & Financial Inclusion: The Opportunities & Challenges for Nigeria.

In a statement, Prince Cookey, Publisher/Editor-in-Chief of Business Journal Media Group said the choice of Umaru Kwairanga to chair the event is a reflection of his immense and chequered journey in the Nigerian economic system over the years.

“Dr. Umaru Kwairanga is a noted player in the Nigerian economy and financial services sector. Over the years, he has carved a positive niche in driving the narrative in national policy formulation, implementation and review. He remains a worthy point of reference and role model to current and future players in the Nigerian economy.”

Alhaji (Dr.) Umaru Kwairanga, Sarkin Fulani Gombe and Group Chairman, Nigerian Exchange Group (NGX), is a notable player in the Nigerian corporate world, a thorough-bred professional and a prominent community leader in Gombe State and the North East region.

He has served at the highest levels of the banking, pension, investment, manufacturing and commercial sectors of Nigeria’s economy. He is the current Chairman of the Nigerian Exchange Group Plc, Nigeria’ oldest stock exchange and also Chairman of Tangerine General Insurance Limited.

The NGX Chairman is also a Director on the Boards of First Bank Senegal Limited, Tangerine Apt Pensions Limited and the Group Managing Director of Finmal Finance Services Limited.

He is a past Chairman of Ashaka Cement plc and previously served on the Boards of Jaiz Bank Plc, Central Securities Clearing System Plc, Lafarge Africa Plc and First Bank Mortgages Limited to mention a few.

Professionally, Alhaji Kwairanga is a Fellow of the Chartered Institute of Stockbrokers, Chartered Institute of Directors of Nigeria, the Certified Pension Institute of Nigeria and the Abuja Commodities and Securities Exchange.

He is also a Council Member of the Chartered Institute of Stockbrokers; the Chartered Institute of Directors and he is the current President of the Certified Pensions Institute of Nigeria.

Kwairanga is a holder of the prominent traditional title of Sarkin Fulani Gombe and has led several initiatives for peace and development in Gombe State and the North East region in general.

He has also been involved in policy and strategy formulation in the public sector as a Member of the Vision 2020 Committee, the Presidential Advisory Committee on the Nigerian Industrial Revolution Plan and several committees of the Securities and Exchange Commission (SEC).