In the Stears Business Newsroom, we do a lot of unpacking. This week, the hot topic was Multichoice and the trillions of taxes that the company allegedly owes the Nigerian government.
Embarrassing headlines aside, owing the taxman money is never fun. Taxes are how the government earns the revenue it needs to pay for crucial social services that we—the citizens—require. Think roads, schools, hospitals. So when a government is unable to generate tax revenue, it becomes very difficult to engage in the crucial spending needed to support the economy.
According to The Economist, African governments lose revenues worth 2% of GDP through corporate-tax avoidance of all kinds, and perhaps another 1-2% through individual wealth stashed abroad. To quantify that in absolute terms, the Federal Inland Revenue Service claims that the country loses $15 billion annually to tax evasion. As we argued last week, Nigeria’s ballooning debt repayments place significant pressure