VAIDS: Nigeria Hires Int’l Asset Tracing Firm, Kroll To Track Tax Evaders

• W’Bank Group, OECD To Help Africa Fight Illicit Financial Flows

Photo Caption: Nigeria’s Finance Minister, Mrs. Kemi Adeosun discussing with the Chairperson of the Illicit Financial Flows Panel of the Platform for Collaboration on Tax (PCT), Grace Navarro, during the PCT Conference organised by the the Organisation for Economic Cooperation and Development (OECD), World Bank Group, International Monetary Fund and United Nations in New York on Thursday, February 15, 2018.

With few weeks to the March 31, 2018 end of the tax amnesty period under its Voluntary Assets and Income Declaration Scheme (VAIDS), Nigeria’s Federal Government has hired Kroll, a leading international Asset Tracing and Investigation Agency (Kroll), with offices in 20 countries, to trace and track illicit flows and assets.
Minister of Finance, Mrs. Kemi Adeosun, disclosed this while speaking at the Platform for Collaboration on Tax (PCT) Conference at the United Nations in New York, where the World Bank Group and the Organisation for Economic Cooperation and Development (OECD) committed to high-level collaborations with Nigeria and other African countries to stop Illicit Financial Flows (IFF) on the continent.
Explaining the idea behind the VAIDS introduced by the Federal Government in June 2017, she said the tax amnesty was aimed at increasing the tax payer base, raising revenue and regularising the tax status of many Nigerians.
The scheme, she explained, was aimed at raising at least $1 billion and bringing in four million new tax payers into the tax net, with the use of technology to improve its accuracy and efficiency.
Continuing, she said “Project Light House is using advanced data mining and data analytics techniques to: identify tax defaulters, establish their tax liabilities and send notifications.
“The system-wide computer software, which drives Project Lighthouse, aggregates data from multiple sources such as bank accounts, land registry records, company registration data, tax filings, customs’ records, asset ownership records, among others, to identify, profile and track tax evaders,” she added.
A statement by Oluyinka Akintunde, spokesman to the Minister on Friday, also quoted her as saying IFF is a problem that urgently requires global focus and actions if Nigeria and other developing countries are to record significant developmental progress.
According to her, “the IFFs are driven by the desire to hide illicit wealth, hide the proceeds away from the public eye and law enforcement agencies and also 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.”
Quoting the report of former South African President Thabo Mbeki’s High-Level Panel on IFFs, the Minister said Africa loses US$80 billion annually to IFFs, with a significant percentage of the loss coming from Nigeria.
In addition, she said Nigeria had signed the Multilateral Competent Authority on Common Reporting Standards, which allows 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 was completed.
She added, “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.”
As part of measures to tackle IFFs, Adeosun called for the tightening of Nigeria’s tax codes and tax laws that encourage tax avoidance as well as strengthening of the tax system to make it more efficient.
Advocating more responsibility on the part of destination countries of illicit financial flows, the Minister advised that beneficial ownership registers should be established to allow authorities track money in financial investigations involving suspect accounts/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, and also the development of a supportive, efficient and speedy process for returning assets to originating countries.
Also speaking, Head of OECD Global Forum on Exchange of Information, Ms. Monica Bhatia, said the partnership would involve automatic information sharing as part of proactive steps to curtail the menace.
“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,” Bhatia added.
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.