As the Federal Government prepares for the enforcement of the new tax laws in 2026, the Federal Inland Revenue Service (FIRS) is rallying key financial agencies in the country to crack down on tax-related crimes bleeding the economy to the tune of $18 billion annually. ABDULWAHAB ISA reports on the outcome of a recent two-day conference on illicit financial flows
Nigeria’s financial system is being hemorrhaged by a silent virus that is oblivious to most Nigerians, Illicit Financial Flows (IFFs).
IFF is the illegal movement of money or capital across borders. It is dressed in different garbs and it is illegal in its origin. Proceeds from crime and transfers, tax evasion by multinationals, proceeds from terrorism financing, and trade mis-invoicing are the newest channels through which the government is losing significant tax revenue, hindering public services and development.
The Nigerian economy has suffered from unrestrained damages inflicted by the menace of IFFs. While the damage endured undetected, a recent study revealed that the government was losing a whopping $18 billion annually to IFFs. This is caused by profit shifting and aggressive tax avoidance practices by some multinational corporations transacting business in Nigeria.
To nip the trend in the bud, FIRS, the country’s tax and revenue collector recently held a two-day conference on illicit financial flows; with the theme, “Combating Illicit Financial Flows: Strengthening Nigeria’s Domestic Resource Mobilisation”.
The Minister of State for Finance, Dr. Doris Uzoka-Anite, broke the ice with her thought-provoking opening on the untamed economic consequences of IFFs. With the menace of IFFs getting entrenched and deepening, Uzoka-Anite urged forces to rally round to dislodge IFFs.
She said, “This gathering reflects a growing recognition that IFFs are not just a technical problem; they are a political, developmental, and national security concern. IFF is a hydra-headed monster that must be eradicated. IFF takes various forms, from terrorist financing to money laundering to corporate tax evasion. Since we are at the taxman’s event, we will limit our conversation to tax avoidance and tax evasion. It is estimated that Nigeria loses $18 billion annually to IFFs due to profit shifting and aggressive tax avoidance practices by some multinational corporations transacting business in Nigeria. Huge sums of money are transferred out of the country, which strips the country of resources that could be used to finance much-needed public services. This means fewer hospitals and schools, fewer police officers on the street, and fewer roads and bridges. It also means fewer jobs,” the minister said.
Ms Uzoka-Anite also said that the war against IFFs was too complex to be left for an agency to confront head-on. She called for inclusivity in the fight against IFFs.
“Indeed, the fight against IFFs cannot be left to one institution alone. It requires a whole-of-government and whole-of-society approach. We must strengthen inter-agency collaboration, enhance data sharing, harmonise policies, and ensure real-time tracking of financial flows.
Internationally, Nigeria continues to demonstrate leadership at the continental and global levels in the fight against IFFs. We remain active in the African Union High-Level Panel on IFFs and are committed to the principles of the Addis Tax Initiative and aligned with global transparency standards, including Organisation for Economic Co-operation and Development (OECD) BEPS (Base Erosion and Profit Sharing) and (United Nations Office on Drugs and Crime (UNODC) frameworks.”
“Our collaboration with UNECA, UNCTAD, and GIABA is helping us develop evidence-based solutions while building institutional capacity across our fiscal and regulatory landscape. More importantly, we remain committed to the ongoing effort at the UN General Assembly towards adopting a multilateral tax treaty; therefore, we pledge our renewed commitment to this process in which we are represented by the FIRS. This government will continue to give FIRS all the support it requires in this regard,” the minister said.
FIRS speaks
The Executive Chairman of the Federal Inland Revenue Service, Dr Zach Adedeji, listed measures the FIRS was taking in checkmating illicit financial flows. He said the tax agency operations had been completely digitalised, in addition to setting up the Tax Intelligence and Automation Department—equipped with real-time analytics to detect anomalies and potential evasion.
Adedeji 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, according to reports, loses billions of Dollars annually through such illicit conduits.”
The FIRS boss emphasised that addressing the issue was not just a policy debate but a “national imperative.”
Adedeji highlighted the administration of President Bola Tinubu’s commitment to fiscal reform, referencing the recent signing of four tax reform bills under the Renewed Hope Agenda.
These legislative changes, he said, 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.
He said, “We are building a tax system that is proactive, smart, and secure. This is not just about digital infrastructure—but digital vigilance.
“The FIRS has also established the Proceeds of Crime Management and Illicit Financial Flows Coordination Directorate, mandated by the Proceeds of Crime Act (2022), aimed at unifying enforcement efforts and enabling coordination with domestic and international partners. These institutional reforms provide Nigeria with critical tools needed to identify, trace, and recover illicit assets,” the FIRS chairman said.
Experts’ views
Experts believe IFF’s war cannot be won in isolation, saying that it was a cross-border menace, a delicate one at that.
Keynote speaker, Hon. Irene Ovonji-Odida, a Ugandan human rights lawyer and member of the AU/ECA High-Level Panel on Ending IFFs from Africa and member of the Thabo Mbeki high-level panel African Africa, dwelt on the illicit financial flows from Africa.
She said Africa had cumulatively lost over $1 trillion to illicit flows over the past five decades.
West and North Africa alone lost $407 billion due to trade misinvoicing in just 10 years.
His words: “Tax avoidance through commercial activities accounts for 65 per cent of Africa’s IFFs, while criminal activities and corruption contribute 30 per cent and 5 per cent, respectively.”
Ovonji-Odida accused Western powers of complicity in shaping global financial rules that favour the siphoning of resources from Africa. She urged African governments to strengthen domestic capacity, develop a united negotiation position at the United Nations, and push for global tax reforms that favour developing economies.
According to her, Africa needs to continue to develop its common negotiating position on global tax reform and, through South-South cooperation, build a global South position in the UN negotiations process.
She said this involves the African Group in New York, finance tax and foreign affairs departments at capitals, and the broader civil society/researchers to match the power of the Western governments; adding that PTLAC may provide a model to build African and interregional mechanisms.
Ovonji-Odida also said that there was need to explore how Africa can use the AU membership since 2024 of the G20 and South Africa’s incoming presidency better to advance its cause of curtailing the menace of illicit financial flows. She further lauded recent tax reform efforts by a few African nations.
“These recent international tax reform efforts aim to correct historical imbalances rooted in colonial and post-colonial structures. The UN Tax Framework Convention supported by developing countries would signify a shift towards rebalancing global economic governance.
“These initiatives have significant implications for domestic processes and national development. Also, Africa needs to strengthen its strategic engagement in this process,” she said.
Also, speaking, the Comptroller General of Nigeria Customs Service, Bashir Adeniyi, highlighted how the Nigeria Customs Service(NCS) is tightening border controls to block illegal cross-border cash movements.
He said, “We once intercepted $8.3 million at Murtala Muhammed Airport,” “but interestingly, the Financial Action Task Force (FATF) was more interested in monitoring inward movement of cash than outward flows. Nevertheless, our duty is to ensure that illegal flows are curtailed,” he said, noting that illegal mining activities is a major source of IFFs in Nigeria, with proceeds often undetected.
Sunday Telegraph reports that the two-day conference pulled participants across key agencies of government—the Central Bank of Nigeria (CBN), Nigeria Customs Service (NCS), the Nigerian Intelligence Financial Unit, the Corporate Affairs Commission (CAC), and the Economic and Financial Crimes Commission (EFCC).
𝗙𝗼𝗹𝗹𝗼𝘄 𝗢𝘂𝗿 𝗪𝗵𝗮𝘁𝘀𝗔𝗽𝗽 𝗖𝗵𝗮𝗻𝗻𝗲𝗹 𝗧𝗼 𝗚𝗲𝘁 𝗟𝗮𝘁𝗲𝘀𝘁 𝗡𝗲𝘄𝘀 𝗔𝘀 𝗜𝘁'𝘀 𝗗𝗿𝗼𝗽!
