ABUJA FEBRUARY 23, 2017 – The country is losing billions of naira in revenue annually as a result of the various tax and double taxation treaties it signed with advanced nations, multinational corporations and high net worth individuals, ActionAid Nigeria and labour unions have said.
To put an end to this, the Nigeria Labour Congress, Trade Union Congress of Nigeria and ActionAid have urged the Federal Government to immediately commence the review of all taxation treaties signed with different nations and multinational companies operating within and outside Nigeria.
They spoke in Abuja on Wednesday during the West African summit of Civil Society Organisations, labour and tax experts on double taxation treaties. The theme of the event was: ‘Rethinking double taxation treaties: A call for review of West African extravagant waivers’.
The Country Director, ActionAid Nigeria, Mrs. Ojobo Atuluku, noted that based on the treaties, Nigeria and other West African nations were willfully giving away resources that would have been utilised for developmental projects and stressed that it was high time that the country abolished all unproductive incentives and tax breaks.
She explained that double taxation treaties, as presented, were aimed at creating enabling environment for businesses to thrive, drive investment, encourage trade and facilitate trade balance among nations in the treaties.
Atuluku said, “However, studies by ActionAid and other development agencies as well as individuals have shown over time that there is a need to take more than a mere cursory look at the treaties. The treaties that most nations in the sub-region have signed on to have become major sources of revenue loss for the nations over the years.
“The nature of the double taxation agreements, usually with advanced economies, and in some cases tax havens, have become avenue through which multinationals, large national corporations and high net worth individuals deny the nations huge tax funds, which could have been plunged into provision of sound education, good health care and social infrastructure.”
Atuluku observed that most times, countries like Nigeria and others in the sub-region entered into the double taxation treaties with the assumption that they are mutually beneficial.
Atuluku added, “However, due to the nature of the economies of the countries, which are mostly non-productive, consuming and net importers of capital, the deals are most times skewed in favour of the more advanced nations and corporations allegedly coming from such nations.
“While we are not going to engage in unnecessary debate on the continued relevance of double taxation treaties, we, however, abide with our position that Nigeria and other West African countries need to review, renegotiate and reverse a lot of existing treaties.”
Speaking on behalf of the NLC, its Assistant Secretary-General, Mr. Eustace James, said the labour movement was fully in support of the call for a reversal or total review of the double taxation treaties signed by the Federal Government with other organisations and countries.
He said, “Nigeria is in dire need of funds and it is worrisome to know that we are losing billions as a result of taxation treaties of this sort. Therefore, the NLC will be proactive and we are ready at any time to mobilise members to campaign against unproductive taxation treaties signed by our government.”
“So, we are calling on the government to as a matter of urgency look into these treaties and commence their review, where necessary, in order to stop the continued loss of revenue.”