Alarm over Rising Tax Evasion

Tax evasions by multinational companies Nigeria is so vast that one tax analyst believes that if the money were paid, Nigeria would have developed now.

Gbemi Olajumoke, a tax consultant said that Nigerian tax system is draconic and lopsided and lends itself to evasion by many multinational companies.

Olajumoke said only a progressive tax regime would control evasion by multinationals and urged tax authorities to adopt sophisticated tax code and employ people qualified to enforce tax laws.

According her, it is unfair that global companies with huge operations in Nigeria are getting away with paying little or no corporation tax here,"

Only recently, Environmental Rights Action/Friends of the Earth, Nigeria (ERA/FoN), accused multinational oil prospecting and exploration companies of tax evasion and underpaying royalties to the government.

Dr. Uyi Ojo, a Political Ecologist and ERA/FoN’s director, Programmes and Administration, said, “So far, the NEITI Secretariat has successfully conducted three audit cycles, the latest being the 2006 – 2008 period.

But  Mr. John Jegede, president, Chartered Institute of Taxation of Nigeria has an idea of how to curb tax evasion with his recommendation of life imprisonment as punishment.

Speaking recently Jegede said, “We have laws in the country that should be respected and the only way we can stop corruption or tax evasion in the country is to follow the law to the latter. The tax evasion suspects should be arraigned before the court and should be punished.

“But to start killing is not really an ideal situation. People are moving away from that. Instead of death sentence, people are given life sentences. They should be given life sentences if the quantum or gravity of such offence demands that they are sentenced. The economy can be driven through taxation.”

He advised that personal and company income taxes should be reduced to guarantee compliance and tax payment.