Nigeria

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Overall Phase 2 Rating is Largely Compliant

Table of Determinations and Ratings of the Phase 2 Review

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Partially Compliant.  More than 400 000 companies registered with CAC are dormant in Nigeria. Those companies do not comply with filing obligations. The enforcement actions undertaken by CAC to strike off the dormant companies from its register and sanctions imposed against non-compliance have been ineffective and insufficient in providing effective deterrence against the continuing existence of dormant companies during the review period.  Nigeria should take adequate and more effective enforcement measures to strike off the dormant companies from the CAC register. 
Although the regulatory and tax authorities monitor and enforce actions against companies and partnerships that do not comply with information filing requirements, the compliance levels of these entities are very low.  Nigeria should take adequate and more effective regulatory and enforcement measures to ensure that companies and partnerships maintain and report their identity and ownership information to the Nigerian authorities regularly in accordance with the statutory requirements. Moreover, Nigeria should monitor the adequacy of sanctions imposed under the relevant tax and commercial laws to ensure that they are effective in providing deterrence against non-compliance of the filing requirements. 
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Partially Compliant.  While several monitoring and enforcement measures are pursued by various agencies in Nigeria, the compliance levels of relevant entities and arrangements in Nigeria on their reporting obligations are generally very low. As a result, availability of accounting information in all cases may not be ensured in practice.  Strict and more effective monitoring and enforcement mechanisms should be put in place to ensure that accounting information is maintained by all relevant entities and arrangements, and regularly filed with relevant authorities in practice in line with statutory requirements. Moreover, Nigeria should monitor the adequacy of sanctions imposed under the relevant tax and commercial laws to ensure that they are effective in providing deterrence against non-compliance of the filing requirements. 
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.     Nigeria should continue to develop its network of EOI mechanisms with all relevant partners. 
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      
Phase 2 Rating Factors Recommendations
Largely Compliant.  During the review period, Nigeria received only 2 out of 8 requests sent by its treaty partners. The non-receipt of requests could be attributed to delays in providing updates on the changes to the competent authority information and addresses, which resulted in treaty partners sending requests to old addresses no longer used by FIRS and to persons retired from their positions as competent authority of FIRS. Nigeria’s treaty partners faced problems in communication with the competent authority of Nigeria in the absence of updated competent authority details. Despite Nigeria’s efforts to update the competent authority information, the lack of a systematic approach to improve communication channels resulted in most of the requests having not been received by Nigeria.  Nigeria should communicate regularly and systematically with all treaty partners and monitor its newly implemented EOI processes to ensure that all requests are successfully received by the EOI Unit. 

Earlier self-assessment based annual reports entitled Tax Co-operation 2010: Towards a Level Playing Field are also available.