The Federal Inland Revenue Service (FIRS) and the Economic Community of West African States (ECOWAS) have initiated a partnership aimed at improving tax administration as well as addressing a range of investment policy issues that impinge on the ability of the private sector to invest efficiently across the region.
This was kicked off during the first Transfer Pricing Regional Meeting for ECOWAS Member States<strong> </strong>in Abuja, Nigeria from October 11-13, under the European-funded<em> Improved Business and Investment Climate in West Africa </em>Project. The project seeks to address a range of investment policy issues that constitute barriers for the private sector to invest efficiently across the region. The transfer pricing component of this project is an example of the World Bank’s initiative to support domestic resource mobilization by helping countries to protect their corporate tax base from profit shifting.
The meeting provided a platform for ECOWAS countries to take stock of the current state of transfer pricing in the region and to determine the direction of further progress.
Over 60 participants, including tax administration and tax policy officials from 15 Member States of ECOWAS as well as representatives from the ECOWAS Commission, the European Union, West African Economic and Monetary Union (WAEMU), the World Bank Group, the Organization for Economic Co-operation and Development (OECD), the African Tax Administration Forum (ATAF), and the West African Tax Administration Forum (WATAF), all attended the three-day event.
Speaking during the meeting, the Executive Chairman of Nigeria’s Federal Inland Revenue Service (FIRS), Mr. Tunde Fowler said that about $3.9 billion revenue is lost yearly by countries in West Africa through tax evasion by multinationals doing business in the region. He also disclosed that an estimate of $2.5 billion was reportedly lost by nations through transfer pricing. ECOWAS has now come out with an estimated $3.9 billion lost through this process.
The transfer pricing program is an element of the <em>Improved Business and Investment Climate in West Africa Project</em>, a four-year initiative that was launched in November 2014. The €7.7 million project, funded by the European Union, seeks to support ECOWAS to improve investment policy in West Africa. The transfer pricing program is implemented by the World Bank Group, in partnership with OECD and ATAF. It is comprised of the following areas of support:
Comprehensive reviews and recommendations on the transfer pricing rules of ECOWAS countries, including a detailed survey and report which was presented at the event.
In-depth long-term support on transfer pricing policy, legislation, and implementation to three ECOWAS countries: Liberia, Nigeria, and Senegal (available to other ECOWAS countries from 2017)
The development of tools to assist ECOWAS countries to increase their capacity on transfer pricing and related issues, and
The identification of ways in which ECOWAS countries can mutually support each other in the development and implementation of transfer pricing rules
http://guardian.ng/news/ecowas-countries-lose-3-9b-tax-income-yearly-says-firs/