The Organisation for Economic Cooperation and Development (OECD) and the World Bank Group have agreed to collaborate with Nigeria and other African countries to stop Illicit Financial Flows (IFF) in the continent.
The Special Adviser to the Minister of Finance on Media and Communications, Mr Oluyinka Akintunde, in a statement last Friday, said that the resolution was reached at the ongoing Platform for Collaboration on Tax (PCT) Conference at the United Nations in New York.
According to Akintunde, the Head of OECD Global Forum on Exchange of Information, Ms Monica Bhatia, said automatic information sharing had been adopted as part of proactive steps to curtail IFFs from the African continent to developed countries.
“The Sustainable Development Goals (SDGs) specifically says that we must significantly reduce illicit financial flows by the year 2030.
“A lot of efforts are ongoing to achieve this and support developing countries to end the IFFs,” she said.
The Minister of Finance, Mrs Kemi Adeosun, said that IFF was a problem requiring urgent global focus and actions towards the realisation of significant developmental progress for Nigeria and other developing countries.
“The IFFs are driven by the desire to hide illicit wealth, hide the proceeds away from the public eye and law enforcement agencies and conceal the ways and means by which illicit wealth was created.
“ This makes it difficult to trace the associated money flow.
“Developing countries, including Nigeria, collect significantly lower levels of tax, as a percentage of Gross Domestic Product (GDP), than wealthier states.
“This is partly because the income and wealth being created is taken out of the country illegally, without being taxed,” she said.
Quoting the report of former South African President Mbeki’s High-Level Panel on IFFs, Adeosun said that Africa lost 80 billion dollars annually to IFFs, with a significant percentage of the loss coming from Nigeria.
She disclosed that the Nigerian government had engaged a leading international Asset Tracing and Investigation Agency (Kroll), to trace and track illicit flows and assets.
She said that Nigeria had also signed the Multilateral Competent Authority on Common Reporting Standards, which allowed for exchange of financial account information.
The country, according to her, is expected to effect the first exchange by 2019 as soon as the domestic legal framework is completed.
“Nigeria has adopted the Common Reporting Standards and the Addis Tax Initiative aimed at improving the fairness, transparency, efficiency and effectiveness of the tax system.
“Furthermore, as part of open government partnership, Nigeria has included in the National Action Plan, a commitment to establish a public register of beneficial owners.
“To this end, the Corporate Affairs Commission, the custodian of Nigeria’s company registry, is pursuing relevant amendments to the Companies and Allied Matters Act to comply with global standards,” she said.
As part of measures to tackle IFFs, Adeosun said that the Nigerian government was working to tighten its tax codes and laws to discourage tax avoidance and strengthen the tax system to make it more efficient.
Adeosun also said that to resolve the issue globally, beneficial ownership registers should be established to allow authorities track money in financial investigations involving suspect assets held by corporate vehicles.
She further called for the elimination of safe havens that provide incentives for transfer of stolen assets and illicit financial flows abroad.
She also harped on the importance of having a supportive, efficient and speedy process for returning stolen assets to originating countries.
The PCT Conference is a collaborative initiative of the Organisation for Economic Cooperation and Development (OECD), World Bank Group, International Monetary Fund and United Nations.
The inaugural PCT Conference, which has as theme “Taxation and the Sustainable Development Goals (SDGs)”, is focusing on the opportunities and challenges for taxation and its role in supporting the SDGs.
It covers practical aspects of tax policy and administration, as well as encourages an open change of experience and views on how to ensure taxation policy and practices can improve SDG outcomes.