Nigeria and other Sub-Saharan African nations lose about $730 million annually to tax avoidance, according to a new report by the International Monetary Fund (IMF).

“Governments in sub-Saharan Africa now under tremendous pressure to raise public spending in response to the pandemic are losing between $450 and $730 million per year in corporate income tax revenues as the result of profit shifting by multinational companies in the mining sector,” IMF in the report said.

The fund, in its latest report, revealed that Africa is under tremendous pressure to increase public spending to address the effect of the deadly COVID-19 pandemic.

It said profit shifting has put unprecedented stress on the international corporate tax system.

The IMF disclosed that multinational companies were using their global reach to reduce tax liabilities in high-tax jurisdictions by shifting profits to lower-tax countries.

Also, the IMF disclosed that Africa possesses 30 per cent of global mineral reserves which is a major opportunity for the region, suggesting that targeted policy actions be taken to reduce tax avoidance and help recover the highly needed tax revenue.

According to the report, these findings come amidst global efforts to address the grievance impact of tax competition and profit-sharing by multinational companies.

The fund said that maximum tax acquisition will aid Africa’s economic recovery efforts to fully recover from the impact of the COVID-19 pandemic and meet the SDG goals.

A month earlier, chairman of the Federal Inland Revenue Service (FIRS) Muhammad Nami, revealed that only 41 million of Nigeria’s over 200 million population pay taxes.