Finance minister Zainab Ahmed asks IMF to help Nigeria with tax collection from oil corporations

NIGERIA'S finance minister Zainab Ahmed has asked the International Monetary Fund (IMF)  to come to the assistance of the federal government in the collection of tax revenue from oil multinationals operating within the country.

At the moment, Nigeria has one of the lowest tax to gross domestic product (GDP) ratios in the world, with the figure sitting at a meagre 6%. Traditionally, the government has relied on revenue from oil proceeds, neglecting other sources of money like income tax, value added tax and corporation tax, making Nigeria a mono-economy.

Speaking on the sidelines of the ongoing 2018 IMF/World Bank Group Meetings, in Bali, Indonesia. Ms Ahmed said the federal government is seeking assistance to address the problem. She added that the government is talking to the IMF to help with modalities  for improving  tax collection, especially from the international oil companies as the government has to be in a position to develop tools  that could help pursue taxes, especially from very large corporates.

Ms Ahmed said: This is the industry that, from the Thabo Mbeki Report, shows that about 70% of the illicit financial flows that go out of Africa, Nigeria included, are related to the extractive industry. So we did ask for how we can effect transfer pricing and how we can stop the flows from that sector.”

She added that the international oil companies have the greatest tax potential in Nigeria and these revenues are needed to enhance development. According to Ms Ahmed, Nigeria’s  delegation also met with investors from different parts of the world and told them that Nigeria is a good place to do business and that the returns they will get are high, at about 14% compared with the international average of about 4%.