Civil Society Legislative Advocacy Centre (CISLAC) has said the country loses about $2.9 billion yearly on tax waivers granted to multinational companies.
This was as the organisation revealed that Africa lost over $1 trillion to Illicit Financial Flows (IFFs) in the last 50 years, with a yearly loss of $50 billion.
Executive Director, CISLAC and Transparency International, Nigeria, Auwal Rafsanjani, disclosed this in Abuja, yesterday, at the Pan-African Conference on Combating Illicit Financial Flows to Bridge Africa’s Widening Inequality Gap.
Rafsanjani regretted that despite the huge loss to tax waivers, the government unjustly increased Value-Added Taxes (VAT), which, according to him, further impoverished the poor.
He said IFFs connected with corruption, crime and tax evasion are an issue of increasing concern as they reduce government revenue for financing sustainable development.
He said: “International Monetary Fund and the World Bank have all expressed concerns over the likely sharp increase in inequality and poverty arising from the pandemic, with estimates projecting that 42.1 per cent of the sub-region will be pushed into extreme poverty.
“Worse yet, the World Bank further indicated that the poverty increase could take more than a decade to reverse, erasing all hopes of countries meeting their national development targets to reduce poverty and inequality by 2030.
“On the other hand, the wealthiest people in the region fare differently, as the three wealthiest men in the region, who are all based in Nigeria, have seen their wealth expand from $16.8 billion in March 2020 to $23.2 billion by July 2021, which is more than enough to fund a full vaccine programme for the entire West African population.
He stated that the amount lost to IFFs in Africa is roughly equivalent to all the Official Development Assistance (ODA) received by the continent during the same timeframe.
Rafsanjani, however, said these estimates might fall short of reality because accurate data do not exist for all African countries. “These estimates often exclude some forms of IFFs that by nature are secret and cannot be properly estimated, such as proceeds of bribery and trafficking of drugs, people and firearms,” he said.
Rafsanjani added: “The amount lost yearly by Africa through IFFs is therefore likely to exceed $50 billion by a significant amount. Although the figures on IFFs are heavily disputed, current analyses agree that IFFs exceed the amount of ODA provided to Africa.”