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Finance minister says illicit financial flows threaten economic stability

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Finance Minister

Zainab Ahmed, minister of finance, budget and national planning, said illicit financial flows erode domestic revenues and threaten economic stability.

Ahmed made the disclosure on Tuesday, May 18 during her keynote address at the international conference on illicit financial flows and asset recovery.

The minister said Nigeria has implemented significant measures to curb illicit financial flow and ensure asset recovery.

She pointed out several measures implemented by the government including deployment of technology in tax collection, saying they have reduced crime and increased public trust.

She warned that if unchecked, illicit financial flows will continue to “significantly erode domestic revenues, enable corruption, threaten economic stability and sustainable development, divert money from public priorities and hamper government’s efforts to mobilize domestic resources and recover better.

“As one of the most affected countries, Nigeria has demonstrated strong commitment to addressing illicit financial flows through our participation in the Open Government Partnership and the significant progress made in the extractive industry.

“We have demonstrated that technology-enabled improvements in tax collection and compliance help deter tax crime and facilitate public trust.

 “Also, the mainstreaming of transparency and anti-corruption measures into economic-policy-making processes significantly reduces crime.

“Similarly, establishing an accurate, up-to-date and public beneficial ownership register; and strengthening the automatic exchange of tax information; helps address the commercial components of illicit financial flows.”

She noted that about 65 percent of illicit financial flows across Africa is derived from commercial activities such as aggressive tax avoidance and tax evasion, abusive transfer pricing, profit shifting, among others.

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Meanwhile, Techeconomy.ng previously reported that the Senate summoned the minister and the Accountant General of AGF, Ahmed Idris, over an alleged secret withdrawal of N7.5bn from the two per cent National Automotive Design and Development Council Levy Account domiciled with the Central Bank of Nigeria.

The Senate Public Accounts Committee on Tuesday, April 13, disclosed this in a report of the auditor-general, currently being scrutinised by both chambers of the National Assembly.

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The report noted that the first tranche of N3.8bn was withdrawn in two installments of N2.8bn in 2005 and N1bn in 2006.

It added that the second tranche of N3.7bn, the report added, was withdrawn between March and December 2000 in three separate payments of N725m, N1bn and N2bn.

 

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