ECOWAS countries lose $3.9b tax income yearly, says FIRS
Fowler said the income is lost through the Transfer Pricing (TP) tax mechanism employed by the corporations.The FIRS chairman made the disclosure yesterday in Abuja at the opening of a meeting comprising delegates from the Economic Community of West African States (ECOWAS) and the World Bank Group, who assembled to discuss ways to improve revenue generation from taxes so as to enhance the development of member states with focus on transfer pricing.
Commending participants, especially development partners, Fowler said the issue of transfer pricing was crucial and appealed to organisations to avoid the act.
He said in the past, oil was the revenue earner for Nigeria, adding, “it is now clear that we cannot depend on natural resources. It has become imperative for every nation to rely on tax instead of natural resources such as oil.
“At an Organisation for Economic Co-operation and Development (OECD) event, an estimate of $2.5 billion was reportedly lost by nations through transfer pricing. ECOWAS has now come out with an estimated $3.9 billion lost through this process. This makes it crucial for organisations to prevent it.”
ECOWAS Commissioner for Industry and Private Sector Promotion, Kalilou Traore said the organisation recognised the importance of internationally shared transfer pricing principles for the region.
He said that ECOWAS was committed to implementing programmes that would facilitate regional integration and make it work for private sector operators and the people of the region.
Senior Governance Specialist, World Bank Group, Roland Lomme, noted that West Africa has enormous potential to increase the flow of investment to drive growth, reduce poverty and deliver jobs to the region.
Also, the Head of Economic Cooperation and Energy Section, Juan Casla, who represented Ambassador Michel Arrion, the head of European Union (EU) to Nigeria and ECOWAS said the union financing the project was a testimony of the commission’s commitment to support developing countries to establish efficient, fair and transparent tax systems.