Nigeria Approves Tax Treaties With Ghana, Tanzania, Switzerland

The Nigerian Government has approved Double Taxation Avoidance Agreements with Ghana, Tanzania and Switzerland to create a more conducive investment climate for Nigerian businesses and attract more foreign capital.

Minister of Finance and Coordinating Minister of the Economy, Prof. Taiwo Oyedele, announced the approval on Wednesday while briefing State House correspondents after the fourth Federal Executive Council meeting of the year, chaired by President Bola Ahmed Tinubu in Abuja, the nation’s capital

Oyedele explained that the agreements would protect businesses and investors operating between Nigeria and the three countries from being taxed twice on the same income, thereby removing a major constraint to cross-border investment.

The Minister said the agreements formed part of the Nigerian Government’s broader economic strategy to expand Nigeria’s tax treaty network, improve the investment environment and strengthen the country’s competitiveness in attracting international capital.

“The overall objective of these treaties is to ensure that Nigeria can expand the opportunities available to our businesses to invest in other countries, and also for us to attract investment from those other countries, particularly where we have a lot of interest between our countries, for example, Ghana”, he revealed.

READ ALSO: ECOWAS Moves to Address Double Taxation

Oyedele said Nigeria would continue to expand its network of Double Taxation Avoidance Agreements to enhance its competitiveness with leading African economies.

He noted that South Africa currently had more than 60 such treaties, saying that the latest approvals represented another step towards deepening Nigeria’s economic relations and facilitating investment flows with key trading partners.

The Minister also disclosed that FEC had approved a $1.25 billion financing facility from the International Development Association and the International Bank for Reconstruction and Development to support the country’s investment and employment-generation programme.

According to him, the funding will be channelled into Nigeria’s Investment and Jobs Acceleration Development Policy Financing programme, with emphasis on stimulating investment and expanding employment opportunities.

Oyedele said the facility was secured on concessional terms, with a repayment period of approximately 30 years.

“Council approved the $1.25 billion financing facility from the International Development Association and the International Bank for Reconstruction and Development in support of Nigeria’s actions for investment and job acceleration development policy financing.

“So this is a concessional facility with repayments of like 30 years, which we are going to dedicate to helping to accelerate job creation,”  he stated

The Minister said employment generation remained one of Nigeria’s most urgent priorities, making the facility important to the administration’s wider economic programme.

President Tinubu Orders Forensic Probe 

Meanwhile, President Tinubu has ordered a comprehensive forensic investigation of Federal Government administrative, accounting and payroll systems following the discovery by the Independent Corrupt Practices and Other Related Offences Commission (ICPC) of additional fake government agencies.

READ ALSO: Fake Agencies, IPPIS Face Forensic Probe

Oyedele said the investigation would examine the processes, procedures and internal control weaknesses that enabled a fake body known as the Presidential Foreign Intervention Promotion Council and other fictitious agencies to penetrate the Federal Government’s administrative system.

He disclosed that the ICPC investigation had established that there were additional fake agencies beyond the one initially uncovered.

According to him, FEC also directed that a forensic investigation be undertaken to establish what went wrong, identify the loopholes exploited and strengthen government systems against a recurrence.

“The review will also extend to the Integrated Personnel and Payroll Information System (IPPIS), amid concerns that the existence of fictitious government agencies could also mean the presence of fake employees on the Federal Government payroll.

“Because if you have fake agencies, you most likely have fake employees,” Oyedele said.

He further explained that the President directed the Office of the Attorney-General of the Federation and the Ministry of Finance to work with other relevant government ministries, departments and agencies to comprehensively investigate the matter.

Oyedele said the exercise would examine administrative, accounting and wider governance weaknesses that permitted the development.

He disclosed that the fake agency had gone as far as securing an office within the Federal Government structure, an administrative code and a Treasury Single Account code.

The Minister of Finance and Coordinating Minister of the Economy, however, stressed that no government funds were eventually paid into the accounts associated with the fictitious agency.

“Something went wrong. Someone managed, with whatever people they colluded with, to create a fake agency that had an office within the institution of the Federal Government.

“They managed to register and obtain an administrative code, as well as a TSA code. The only thing that didn’t happen was that we didn’t pay any money to those accounts. But you see, it’s gone too far to even get to that level,” he disclosed.

Oyedele said the government’s immediate objective was to determine precisely how the breaches occurred and introduce safeguards to ensure they could not be repeated.

He declined to identify the additional fake agencies uncovered by the ICPC, saying he was unable to provide the details at the briefing.

Providing further clarification, the Minister of Information and National Orientation, Mohammed Idris, said the ICPC’s investigation followed President Tinubu’s earlier directive to the anti-corruption agency to probe the matter.

According to Idris, the commission’s report to the President indicated that at least two additional fake agencies had been discovered in the course of the investigation.

He noted the findings raised concerns beyond financial transactions, pointing to administrative weaknesses that allowed fictitious entities to progress significantly through the Federal Government system, saying the President consequently directed the Attorney-General of the Federation and the Finance Minister to jointly review both the administrative and accounting systems involved.

The President, he stated, directed them to engage professional audit firms to conduct forensic examinations of the relevant systems, identify the loopholes and permanently close them.

The Minister emphasised that the exercise would be a “total evaluation” of the system to prevent another incident capable of causing national embarrassment.

Idris also cautioned against assuming that the weaknesses originated under President Tinubu’s administration, saying the vulnerabilities could predate the current government.

He added that the President wanted the investigation broadened to determine whether similar irregularities existed elsewhere in government and to develop systemic safeguards against their recurrence.

Oyedele, meanwhile, linked the decision to scrutinise IPPIS to the government’s efforts to improve remuneration for legitimate public servants and prevent scarce resources from being diverted to fictitious personnel.

He said the Nigerian Government had spent about N9.5 trillion in incremental payments of salaries and allowances to civil servants, an amount he said was higher than the subsidy savings accruing to the government.

According to him, allowing fictitious agencies or employees to remain within the government system would undermine the administration’s ability to improve the remuneration of legitimate workers.

“We can’t afford to have fake people hanging around. It undermines our ability to pay our people well, who are doing the hard work,” Oyedele said.

He assured Nigerians that the government would provide updates as the investigation progresses, stressing that the administration intends to deal decisively with the weaknesses exposed by the ICPC investigation and strengthen the integrity of the Nigerian Government’s financial and administrative systems.