The Hidden Cost of Corporate Tax Avoidance in Nigeria

The United Nations has a clear stance on human rights. Everyone should have access to basic needs like clean water, healthcare, and education. These rights are essential for a good life. But many people around the world still don't have these basics. One big reason is that governments don't have enough money to provide them. This is partly because multinational companies move their profits to avoid paying taxes where they operate. This practice is known as profit shifting. It's a big problem, especially in countries like Nigeria. In Nigeria, the impact of profit shifting is severe. A recent study looked at how much money Nigeria loses when companies shift profits to European tax havens. The findings are shocking. If Nigeria had the tax revenue it lost, it could provide clean water to an extra 500, 000 people. It could also ensure basic sanitation for nearly 800, 000 more people. Education for 150, 000 children and the survival of 11 children each day could also be guaranteed. That's 4, 063 children's lives saved each year. Better governance would also result from increased revenue. Meanwhile, the European countries that benefit from these shifted profits already have these basic rights covered for their citizens. So, the gains for them are almost nothing. The Organisation for Economic Co-operation and Development (OECD) has tried to tackle this issue. But their efforts aren't enough. They need to do more to create a fair international tax system. All European countries should support United Nations negotiations on international tax cooperation. This includes reforms on how to regulate multinational corporations. One solution could be unitary taxation with formulary apportionment. This would make sure companies pay taxes where they actually operate. In the meantime, there are steps that can be taken to reduce the harm caused by profit shifting. Countries need to raise the global minimum corporate tax rate. They should also introduce their own measures to tax multinational corporations. Improving tax transparency and information sharing with lower-income countries is crucial. Strengthening anti-avoidance rules is another important step. These measures can help ensure that countries like Nigeria get the tax revenue they deserve. This would go a long way in fulfilling the basic human rights of their citizens.