FIRS: Leading Nigeria’s war against illicit financial flows

The Federal Inland Revenue Service (FIRS), under the leadership of its Executive Chairman, Zacch Adedeji, is spearheading a new and coordinated battle to stop the hemorrhage of Illicit Financial Flows, writes JOSEPH INOKOTONG:

Nigeria is bleeding billions of dollars every year through illicit financial flows (IFFs), a hydra-headed monster draining the nation’s resources, undermining governance, and stalling development. Conservative estimates put the country’s annual loss at over $18 billion, siphoned away through aggressive tax avoidance, profit shifting by multinationals, money laundering, and trade misinvoicing. This represents funds that could have built new hospitals, schools, roads, and public infrastructure, or created jobs for millions of unemployed Nigerians.

Now, the Federal Inland Revenue Service (FIRS), under the leadership of its Executive Chairman, Zacch Adedeji, is spearheading a new and coordinated battle to stop the haemorrhage. The agency is deploying technology, tightening enforcement, and rallying stakeholders locally and globally to confront the menace.

At a two-day national conference held in Abuja, themed “Combating Illicit Financial Flows: Strengthening Nigeria’s Domestic Resource Mobilisation”, top government officials, financial experts, tax administrators, and international partners sounded the alarm over the scale of the problem and charted a path to recovery.

In his keynote address, Adedeji painted a grim picture of how IFFs weaken Nigeria’s fiscal stability and widen inequality. He said every unaccounted dollar is a lost road, hospital, or job. “Illicit financial flows do not merely represent financial wrongdoing,” he said. “They constitute a structural drain on our economy. Each unaccounted dollar undermines governance, erodes public trust, and translates into lost infrastructure, inadequate services, and deepening inequality.”

The FIRS boss lamented how multinationals exploit opaque global tax arrangements to shift profits out of Nigeria, starving the country of much-needed tax revenue. But he expressed optimism that President Bola Tinubu’s Renewed Hope Agenda had provided the political will for sweeping tax reforms. “Under the Renewed Hope Agenda, we have entered a new era of fiscal reform,” he said, referring to the four new tax reform bills signed into law in June. “But legal reform is only a starting point. To deliver results, we must strengthen enforcement, optimise digital compliance, and build public trust through fairness and transparency.”

Also speaking at the event, the Minister of State for Finance, Dr. Doris Uzoka-Anite, described IFFs as not just an economic issue but a national security and political challenge. “Nigeria loses an estimated $18 billion annually to IFFs,” she disclosed, blaming profit shifting and aggressive tax avoidance by some multinational corporations. “This is money that could have built schools, hospitals, bridges, and provided jobs for our young people,” Uzoka-Anite added.

She described IFFs as a “hydra-headed monster” and stressed the need for coordinated action, including a review of Nigeria’s international tax treaties to ensure fairness between the global North and South. “Many of our existing treaties no longer reflect our economic realities. They must be renegotiated to align with our new tax reforms and ensure equity.”

Adedeji outlined a three-pronged strategy being implemented by FIRS to combat IFFs. First is the building of voluntary tax compliance: FIRS is promoting taxpayer education and simplifying tax systems to encourage voluntary compliance. “Compliance must be driven by trust, not fear,” he emphasized. Harnessing of technology is the second leg. A new Tax Intelligence and Automation Department has been established to track suspicious transactions in real time. Using integrated third-party data, real-time analytics, and anomaly detection, FIRS is moving from traditional audits to “digital vigilance.” The third phase entails strengthening collective action. As the designated coordinating agency under the Proceeds of Crime Act (2022), FIRS has set up the Proceeds of Crime Management and Illicit Financial Flows Coordination Directorate. The unit works with law enforcement agencies, the judiciary, private sector players, and international partners to recover stolen assets. “Criminal networks adapt quickly,” Adedeji warned, and stressed: “Our response must therefore be agile, intelligence-led, and globally coordinated.”

In the criminal enterprise of IFFs, Africa faces the challenge of reversing the $1 trillion lost in 50 years, an expert said. Hon Irene Ovonji-Odida, a member of the Thabo Mbeki High-Level Panel on IFFs from Africa, 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. “Tax avoidance through commercial activities accounts for 65% of Africa’s IFFs, while criminal activities and corruption contribute 30% and 5% respectively,” she highlighted.

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.

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The Comptroller General of Customs, Bashir Adeniyi, highlighted how the Nigeria Customs Service (NCS) is tightening border controls to block illegal cross-border cash movements. “We once intercepted $8.3 million at Murtala Muhammed Airport,” he recalled. “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 illegal flows are curtailed,” he pointed out, noting that illegal mining activities were a major source of IFFs in Nigeria, with proceeds often smuggled out undetected.

Experts at the conference agreed that government action alone would not be enough. They stressed that civil society organisations, the private sector, and international partners must all play a role in closing loopholes. “The complexity of IFFs demands a whole-of-society approach,” said Uzoka-Anite, adding that “Our fight must combine tax reforms, enforcement, technology, and citizen awareness.”

Pointing the way forward, the conference ended with a strong call for renegotiation of outdated international tax treaties to ensure equity for developing countries. It canvassed stronger domestic laws and enforcement capacity, including better funding for tax and financial intelligence units, as well as regional and global collaboration, especially through African Union and United Nations frameworks. It sought public education and media partnership to promote tax compliance and expose financial crimes.

Nigeria’s battle against IFFs is far from over, but the momentum appears to be building. With the FIRS championing technological innovation and inter-agency cooperation, and with political backing from the federal government, the tide may finally be turning.

If the country succeeds in blocking the estimated $18 billion annual leak, it could channel those funds into infrastructure, healthcare, education, and job creation—paving the way for a more inclusive and prosperous economy. As Adedeji aptly put it, “Every unaccounted dollar is a lost road, hospital, or job. Stopping IFFs is not just an economic reform; it is a national imperative.”