FG solicits global action against illegal financial flows

Vice President of Nigeria Yemi Osibanjo has called for tax reformation around the world to fight against illicit financial flow
Ernest Sunday

The Federal Government of Nigeria, through its Vice President, Yemi Osinbajo has called on the world to fight against illegal financial flow around the globe and also for the reformation of the international tax system.

Osinbajo made the call on Monday, September 28, 2020, at the virtual press launch of a publication by the United Nations Conference on Trade and Development (UNCTAD) on the impact of illicit financial flows (IFFs) on African Development.

The major causes of illicit financial flow

According to Osinbajo, the inability of countries especially Africa to pay taxes is the major problem that leads to the illicit financial flow, and it should be looked at by every government around the world.

“The enormity of efforts required to tackle illicit financial flows is evident in the many dimensions the scourge presents itself.

"It manifests through harmful tax policies and practices, abusive transfer pricing, trade mispricing and misinvoicing, illegal exploitation of natural resources as well as official corruption, and organized crimes.

"We have to pay particular attention to efforts to reform the international tax system.”

“The commercial form of illicit financial flows, especially tax evasion and aggressive tax avoidance accounts for up to 65 per cent of illicit financial flows.

Vice President Yemi Osibanjo also called on county leaders to stop accepting illicit fund

"This means that we must pay particular attention to these issues which are aided by things such as tax treaties, financial secrecy jurisdictions and indeed tax competition which leads to a ‘race to the bottom’ in terms of tax rates amongst developing countries.”

The call for fight against illicit financial flow

Osibanjo also called on the leaders of countries where such illicit funds are diverted to step up and fight against such corruption and make sure the offenders of such crime are punished.

"Another important issue that we must pay attention to is the identification and return of proceeds of illicit financial flows back to countries of origin as an effective deterrent to the scourge of illicit financial flows.

"Certainly, exposing those involved in practices that facilitate illicit financial flows, and retrieving proceeds of illicit funds are efficacious in deterring perpetrators, rebuilding the confidence of the citizenry, and compensating for the damage caused by such crimes.

The Vice-President also called on leaders of every country to make sure that such illicit funds are not received in their countries.

“I encourage all leaders, whose countries are considered absolute outliers for illicit financial flows, to join forces and take the responsibility of combating the scourge by insisting on the repatriation of illicit funds and their proceeds.

“Let me also avail myself of this opportunity to call on leaders, whose countries are the main destinations for illicit financial flows, to take concrete steps to prevent and stop the receipt of illicit funds into their countries, and to assist in freezing, seizing, and returning such funds and its proceeds already in their countries”.

He also called for collaboration among “private sectors, civil societies, trade unions and professional groups to work with governments in tackling illicit financial flows.”

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