Nigeria has joined 71 other countries to combat tax evasion as the Federal Inland Revenue Service (FIRS) has signed two major multilateral instruments.
Chairman, Mr. Tunde Fowler, Executive Fowler signed the agreements on behalf of Nigeria in Paris, with Mr. Ben Dickinson, head of global relations and development division of the Organisation for Economic Cooperation and Development (OECD), in attendance.
The agreements will give Nigeria automatic exchange of tax and financial information among 101 tax jurisdictions and enhance the country’s ability and those of the other countries to contain tax avoidance and evasion as well as share financial data.
The MLI is a legal instrument designed to prevent Base Erosion and Profit Shifting (BEPS) by multinational enterprises. It allows jurisdictions to transpose results from the OECD/G20 BEPS Project, including minimum standards to implement in tax treaties to prevent treaty abuse and “treaty shopping”, into their existing networks of bilateral tax treaties in a quick and efficient manner.
The CRS MCAA is a multilateral competent authority agreement based on Article 6 of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which aims to implement the automatic exchange of financial account information pursuant to the OECD/G20 Common Reporting Standard (CRS) and to deliver the automatic exchange of CRS information between 101 jurisdictions by 2018.
The text of the CRS MCAA, background information and the list of the 94 signatories are available on OECD website. Saint-Amans explained that the agreements will provide “automatic exchange of tax and financial information among 101 tax jurisdictions and enhance the ability of countries to contain tax avoidance and evasion.
The scheme which started July 1, offers a window for those who, before now, have not complied with extant tax regulations to remedy their positions by providing them limited amnesty to enable voluntary declaration and payment of liabilities.