Stephanie Iyimoga

last updated Thu, May 11, 2023 12:28 PM

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Banks demand  tax clearance certificate for foreign exchange transactions in Nigeria

By Stephanie Iyimoga
| Updated 12:28 11/05/2023
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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.



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