New research from ActionAid has exposed the multinationals dodging taxes in Nigeria. Shell is considered to be among one of the biggest offenders. As Tunde Aremu of ActionAid reports:
Shell, with its massive interests in the Niger Delta, has 18 subsidiary companies located in Nigeria, but 455 in tax havens around the world. BP has six companies in Nigeria, but 537 registered in tax havens.
While this research does not prove tax avoidance in itself, multinationals need to explain why they have so many subsidiaries registered in tax havens. There are great challenges with getting accurate data on how much countries actually lose due to tax avoidance and the financial secrecy that tax havens create makes the task even more difficult. Despite this, it is suspected that the amounts lost would be enough to solve many of the country’s development challenges.
Research suggests that poor and middle-class Nigerians pay proportionally more in taxes than the rich and big corporations. Urgent action is needed from the Nigerian government and the international community to change this unsustainable situation.
Greater transparency is vital both in Nigeria and internationally, so civil society can hold companies and governments to account. Many multinationals deliberately exploit the system by registering multiple companies in Nigeria. Most of the times, it is hard to know which of these registered entities have genuine operations in the country.
if a blind eye continues to be turned to the huge amounts of money that could be siphoned into tax havens before it ever reaches government coffers, Nigeria will remain mired in poverty.
All of the current development challenges in the nation, which accounts for a quarter of Africa’s population, are traceable to a lack of adequate resources. These resources for development could easily be generated if the attitudes of multinationals towards paying their taxes changed.