FIRS’ Vigilant Response to Combat Tax Evasion in Nigeria

Introduction: Transfer pricing, a common practice in multinational corporations (MNCs), involves setting the prices for transactions between related entities. While legitimate and essential for business operations, transfer pricing can be manipulated for tax evasion purposes. Recognizing this, the Federal Inland Revenue Service (FIRS) in Nigeria has implemented robust measures to curb transfer pricing abuse and ensure fair taxation. This article delves into the impact of transfer pricing abuse on tax evasion and examines FIRS’ vigilant response to safeguard the integrity of the tax system. Understanding Transfer Pricing Abuse: Transfer pricing abuse occurs when related entities manipulate the prices of transactions to shift profits to jurisdictions with lower tax rates, thereby minimizing their overall tax liability. Common tactics include overpricing or underpricing goods, services, or intellectual property transferred between affiliated entities. Impact on Tax Evasion: FIRS’ Proactive Measures to Combat Transfer Pricing Abuse: The Significance of Combating Transfer Pricing Abuse: Conclusion: FIRS’ resolute response to transfer pricing abuse underscores its commitment to maintaining a fair and transparent tax system in Nigeria. By implementing regulations, leveraging international collaborations, and deploying specialized units, FIRS is actively addressing the challenges posed by transfer pricing manipulation. As the business landscape continues to evolve, FIRS remains at the forefront of efforts to safeguard the nation’s tax revenue and promote equitable taxation practices among multinational corporations. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.