The Nigerian government has mandated commercial banks and Ministries, Departments and Agencies of Government or MDAs to insist on a valid Tax Clearance Certificate or TCC before conducting any business transaction with individuals and organisations in the country, this is according to Thisday.
The provision is in line with Section 85 of the Personal Income Tax Act (PITA), 2011 (as amended) and Section 31(5) of the FCT-IRS Act, 2015, and is already in effect in the Federal Capital Territory and other parts of the country.
According to the FCT-Inland Revenue Service, “This regulation covers applications for government loans, registration of motor vehicles, applications for foreign exchange or exchange control permission, award of contracts by the government and its agencies, and registered companies.”
“MDAs, banks, and corporate bodies must ensure all presented TCC go through a rigorous verification process by the issuing tax authority to ascertain their authenticity,” the FCT-IRS said.
The regulation is intended to ensure that all residents of the FCT fulfil their tax obligations as required by law. The FCT-IRS stated that filing annual returns is mandatory for all residents of the FCT, and failure to comply would attract strict sanctions, as stipulated by law.
The directive is expected to improve revenue generation and ensure compliance with tax laws across the country. The FCT-IRS has also emphasised that it will carry out a routine monitoring and enforcement exercise monthly, quarterly, or annually, and will impose penalties on defaulting entities.
The Nigerian government now requires commercial banks and government bodies to ensure individuals and organizations present a valid Tax Clearance Certificate (TCC) before conducting any business transactions. This policy complies with Section 85 of the Personal Income Tax Act (PITA), 2011 (as amended) and Section 31(5) of the FCT-IRS Act, 2015. It is already being enforced in the Federal Capital Territory (FCT) and across Nigeria.
This regulation affects applications for government loans, motor vehicle registration, foreign exchange requests, government contracts, and company registrations. All TCCs must be verified for authenticity by the issuing tax authorities. The aim of this directive is to ensure all FCT residents meet their tax obligations. Failure to file annual tax returns will result in strict sanctions.
This policy is expected to enhance revenue generation and enforce tax law compliance. The FCT-Inland Revenue Service (IRS) will conduct regular monitoring and enforcement activities, imposing penalties on entities that do not comply.