PREMIUM TIMES investigation also revealed that Venture Garden Nigeria is also planning to transfer the intellectual property rights of its software from Nigeria to the Indian Ocean Island country, in a move experts say is geared towards avoiding paying tax in Nigeria, where it primarily conducts business.
Mr Akinyemiju, 42, is a fintech whiz and CEO of the company. In 2017 he was nominated as one of the top 100 Most Influential People of African Descent in Business and Entrepreneurship. The award is given in support of the International Decade for People of African Descent to be observed from 2015 to 2024 proclaimed by United Nation’s General Assembly resolution 68/237.
The company reportedly has a $60 million investment in five main subsidiaries – education, power, fintech, aviation, and petroleum sectors. The plan stated that the country’s location near the Indian Ocean gives it easy access to developing countries in Africa, the Middle East, India, Indonesia and Vietnam.
Since then African fintech companies have been migrating to open shops in the country. Opening an offshore company in a country of lower to zero tax like Mauritius is not necessarily illegal. Many companies, including tech firms, are attracted by the relatively more favourable business climate in the country.
Tax activists say multinational companies cash in on the type of ownership structure as VGG’s through a cost pushing mechanism known as transfer pricing. In some cases, the parent companies registered in a tax haven charges its subsidiary in other countries for the supply of products and services. These transactions are usually artificial as they are mostly supplied on paper.
But taxation activists have argued that double taxation treaties rob countries like Nigeria the needed revenue for development. Multinational companies have been known to exploit loopholes in such treaties to shift profits to Mauritius in order to avoid paying appropriate taxes, said the UK-based tax watchdog, Tax Justice Network.
In a move that one intellectual property expert described as raising questions about likely tax evasion, the Board of VGG is attempting to transfer the intellectual property rights of some of its payment software used in the power sector from its Nigerian subsidiary to its parent company in Mauritius.