Tax Avoidance By Multinationals Threat To Fiscal Stability, Says FIRS Boss

The Executive Chairman of the Federal Inland Revenue Service (FIRS), Mr Zacch Adedeji, has raised the alarm on the dangers of illicit financial flows (IFFs), particularly aggressive tax avoidance by multinational corporations, calling it a major threat to Nigeria’s fiscal stability.

Speaking at the opening of the National Conference on Illicit Financial Flows, themed “Combating Illicit Financial Flows: Strengthening Nigeria’s Domestic Resource Mobilisation”, Adedeji said the scale and sophistication of financial outflows, including tax evasion, profit shifting, money laundering, and trade misinvoicing, have become a structural drain on the nation’s economy.

He said, “Each unaccounted dollar undermines governance, erodes trust, and translates into lost infrastructure, inadequate public services, and deepening inequality.

“The scale of these flows, especially through aggressive tax avoidance by multinationals exploiting opaque global arrangements, continues to threaten Nigeria’s fiscal stability.”

Nigeria, like many resource-constrained countries, reportedly loses billions of dollars annually through such illicit conduits. The FIRS boss stressed that addressing the issue is not just a policy debate but a “national imperative”.

Adedeji highlighted the administration of President Bola Ahmed Tinubu’s commitment to fiscal reform, referencing the recent signing of four tax reform bills under the Renewed Hope Agenda.

These legislative changes aim to overhaul the tax system, modernise legal frameworks, and institutionalise transparency in revenue collection.

However, he warned that legal reforms alone are insufficient. To effectively combat IFFs, the FIRS Boss said Nigeria must strengthen enforcement, leverage technology, and foster public trust through fairness and strategic communication.

Adedeji outlined a three-pronged strategy being implemented by FIRS.

The first is promoting voluntary compliance through taxpayer education and simplified systems to build a culture of compliance based on trust rather than fear.

The Second is launching a digital transformation programme that includes the creation of a Tax Intelligence and Automation Department. This department will employ real-time analytics and integrated third-party data to detect anomalies and strengthen the security of the tax system.

The third, he added, is enhancing interagency and international collaboration.

He also revealed that Nigeria is reviewing its Double Taxation Agreements, many of which contain outdated clauses that inadvertently allow profit shifting. Renegotiations with several jurisdictions are currently underway to close these legal loopholes.

“Criminal networks adapt quickly,” Adedeji cautioned. “Whether through secrecy jurisdictions, digital innovations, or manipulation of beneficial ownership, illicit actors continue to outpace traditional enforcement. Our response must be agile, intelligence-led, and globally coordinated.”

He urged that the conference move beyond dialogue and produce tangible outcomes such as real-time data sharing between institutions, stricter enforcement measures, and reinforced accountability structures.

Adedeji said, “The time for incremental steps is over. Let this conference mark a decisive shift in Nigeria’s stance against illicit flows — a moment where we stood together to defend the integrity of our tax system and the promise of shared prosperity.”