The Economic and Financial Crimes Commission (EFCC) is stepping up efforts to tackle tax evasion in Nigeria. This initiative aims to boost the country’s revenue, which is critical for its economic growth.
Mr. Ola Olukoyede, the Executive Chairman of the EFCC, made this announcement on October 4, 2024. He spoke during a meeting with the Chartered Institute of Taxation of Nigeria (CITN).
Olukoyede emphasized the urgent need to investigate individuals and corporate entities that evade tax payments. He described these defaulters as threats to the nation’s development.
“We must act decisively against tax evaders,” Olukoyede stated. “Individuals and corporations that have failed to remit their due taxes to the federal government are undermining our economy.”
He assured that the EFCC would work closely with the CITN to identify these offenders. “Our collaboration will help us uncover the facts needed to address tax defaulters. This, in turn, will enhance Nigeria’s revenue profile,” he added.
Taxation has become increasingly vital for Nigeria’s economy. According to Olukoyede, revenue from taxation is expanding and may have surpassed revenue generated from oil and gas.
“Taxation is now a major source of revenue for the government. In fact, reports suggest that it has overtaken oil and gas in revenue generation,” he explained.
This shift indicates a growing reliance on taxation as a means of funding government operations. It is critical, therefore, to ensure that all entities pay their fair share.
Olukoyede highlighted a disturbing trend in the nation’s tax landscape. “We have noticed a gap in tax compliance. Many individuals earn significant incomes yet pay minimal taxes. This is not sustainable,” he said.
The EFCC plans to conduct extensive research into tax evasion. Olukoyede pointed out that this effort is necessary to understand the percentage of tax payers in Nigeria relative to the Gross Domestic Product (GDP).
“There is a need to examine the sectors that are not paying taxes despite making substantial profits,” he remarked.
Such investigations could expose major tax defaulters and enhance the government’s ability to generate additional revenue.
The EFCC has a dedicated section that focuses on tax fraud. This team has successfully recovered billions for the government through various investigations and prosecutions related to tax fraud.
“Taxation attracts criminal behavior due to its revenue potential,” Olukoyede noted. “We are committed to ensuring that tax fraud is addressed effectively.”
The partnership between the EFCC and CITN is crucial in this fight against tax evasion. Olukoyede expressed his commitment to strengthening this relationship.
“We will not take this collaboration for granted,” he assured the CITN team. “As a member of the CITN, we owe it to you to strengthen our ties and enhance our joint efforts.”
Mr. Samuel Agbeluyi, President of the CITN, praised the EFCC’s initiatives. He noted the importance of implementing Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) measures.
“There is no doubt that certain sectors remain vulnerable to exploitation by criminals,” Agbeluyi said.
He called for a Technical Committee to be established between the two organizations. This committee would engage in identifying vulnerabilities associated with tax crimes and evasion.
Recent statistics highlight a decline in tax revenue collection. Reports from the National Bureau of Statistics (NBS) show that Company Income Tax (CIT) collection dropped by 12.87% in the first quarter of 2024.
The CIT collection fell from N1.13 trillion in Q4 2023 to N984.61 billion in Q1 2024. This decline was observed across various sectors, including agriculture, manufacturing, and real estate.
Such figures underscore the pressing need for the EFCC’s investigations into tax evasion.
