By Chinwendu Obienyi
The Executive Chairman, First Inland Revenue Service (FIRS), Babatunde Fowler, has said the introduction of Automatic Exchange of Information (AEI) could be the tool to eradicate tax evasion in the country.
According to Fowler, who stated this at a workshop on automatic exchange of Information at the weekend in Lagos, jointly organised by FIRS and Global Forum on Transparency and Exchange of information for Tax Purposes, the source of revenue in Nigeria has not been sufficient enough for funding, adding that there is need for every African country to maximise its revenue through taxation.
His words: “When we look at our sources of revenue, be it sale of natural assets, oil, iron, diamond, we have it all. But at the end of the day, it is not sufficient enough for us to fund our respective governments. Some countries have different tax systems but at the end of the day, each African country needs to maximize its revenue through taxation and the only way of doing that is when we exchange information.
“Two things come to mind when illicit funds are taken into another country, one is security when the host country don’t ask questions about the source in terms of tax payments and the other is loss of revenue. If developed countries can be watching their bottomline, when I say bottom line, it is not about tax revenue, it is time we do the same”, he stressed.
He added: “After we signed a Memorandum of Understanding (MoU) basically on automatic exchange of information and we got the list of all tax payers within the state and federal levels, and we exchanged information, within three months, we were able to grow our own tax base by close to 300-400,000. And in the last 18 months, we have worked with Nigerian customs and have been able to get in additional N115 billion in terms of Value Added Tax(VAT).”
Corroborating him, the Deputy Head, Global Forum, Donal Godfrey, said AEI could erase the amount of tax evasion in African countries by exchanging information, adding that the continent would receive huge information automatically from financial centres all over the world.
“We hear awful lot of embezzled funds flowed out of Africa and we hear less of solution and at the global forum, we don’t have a theory of everything. But we have theory of some things and we think part of the solution is automatic exchange of financial account information.
“This will mean that Africa will receive a lot of huge information from financial centres all over the world from place like London, Singapore and this will arrive automatically on the tax administration desks annually. So it is potentially a huge change for Africa. At the moment, South Africa and Ghana have keyed into this initiative, we believe Nigeria is capable of keying into this initiative”, Godfrey said.