With national debts rising about tolerable levels, the Tinubu government has realised the importance of not only ensuring an effective tax system in the country but also tackling illicit financial inflows frontally.

The Ministry of Finance, Nigeria Customs Service and Federal Inland Revenue Service (FIRS) are united in spearheading a renewed effort against the practice in collaboration with critical stakeholders.

At a national conference on Illicit Financial Flows organised by the FIRS in Abuja recently, the Minister of State for Finance, Dr Doris Uzoka-Anite, argued that illicit financial flows are a hydra-headed monster that must be eradicated, adding that such practice encompasses terrorism financing and corporate tax evasions.

The Minister of State said the Federal Government is focusing its efforts and attention on conversations around tax avoidance and tax evasion.

Uzoka-Anite hinted that under President Bola Tinubu, Nigeria is undergoing strategic fiscal reforms aimed at building a resilient, self-reliant economy driven by revenue and not by debt or by grant.

She observed that for decades, Nigeria has relied heavily on oil revenue, and this has been volatile and very unsustainable; hence the current reforms which recognise the urgent need to diversify the revenue base, shifting focus from oil to non-oil sources, particularly tax revenue.

She maintained that by strengthening tax systems, the government seeks to create a more inclusive and accountable fiscal framework, one capable of funding national development, reducing debt dependency, and ensuring that all sectors contribute fairly to the nation’s growth.

The Minister insisted that the recent accent to the four tax reform bills by the President marks a significant step forward.

However, she was quick to observe that laws alone are not enough, stressing the urgent need for policy alignment, enforcement, and institutional efforts across the board to curb Illicit financial flows.

She added that Nigeria must modernise its tax and financial frameworks to reduce loopholes that facilitate tax evasion and illicit capital flight.

Besides law enforcement, the Minister stressed that transparency, disclosure, enforcement of beneficial ownership disclosures and improving corporate tax governance to shine a light on opaque financial transactions are all crucial.

“The government is investing in smart technology and real-time data exchange to track, detect, and prevent illicit flows before they even occur. We are also deepening our partnerships with the Central Bank of Nigeria, the Federal Inland Revenue Service, Customs, the NFIU, CAC, EFCC, and other enforcement agencies in building a united front to address tax-related crimes and cross-border financial misconduct. Indeed, the fight against illicit financial flows cannot be left to one institution alone,” she stated.

Uzoka-Anite submitted that tackling illicit flow successfully requires a whole-of-government and a whole-of-society approach.

According to her, illicit financial flows are not inevitable; they thrive where systems are weak and coordination is absent.

She urged tax enforcement organisations to collaborate in protecting tax bases and stop those profits-shifting from Nigeria and without paying appropriate taxes.

On his part, the Executive Chairman of Federal Inland Revenue Service (FIRS), Zacch Adedeji, revealed that the FIRS is simplifying its system by championing voluntary compliance by promoting taxpayer education and a simplified system.

Adedeji said the FIRS has established the Proceeds of Crime Management and Illicit Fraud Coordination Directorate as a designated coordinating agency under the Proceeds of Crime Act 2022, the Service to spearhead the fight against illicit financial flows.

He disclosed that the unit is leading implementation efforts, supporting asset recovery, and coordinating with law enforcement, the Judiciary, private sector actors, and international development partners.

He warned that criminal networks adapt quickly, adding, “Whether through secrecy, jurisdiction, the manipulation of beneficial ownership, or digital innovation, illicit actors continue to outpace traditional enforcement. Our response must therefore be agile, intelligence-led, and globally coordinated.”

The FIRS chief said that the perpetrators engage in monumental tax avoidance, exploiting global arrangements that are threatening Nigeria’s fiscal stability.

He added that like many resource-constrained nations, Nigeria loses billions annually to illicit conduits, which underscores the relevance of the gathering.

He declared that the conference must mark a decisive shift in Nigeria’s stance against illicit flow, a moment where stakeholders stand together to define the integrity of Nigeria’s tax system.

Beyond the economy, illicit flows have security implications. Funds from illegal oil bunkering and arms smuggling are often linked to terrorist groups and violent crime.

The Central Bank of Nigeria (CBN) has also joined its voice to the call for a coordinated approach to trace and return stolen funds. It added that the practice is a major threat to exchange rate stability.