• Tuesday, April 16, 2024
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FCT insists on tax clearance certificate as pre-condition for transactions, services

Unlocking success strategies: Navigating Nigeria’s tax challenges dynamically

The Federal Capital Territory Administration has warned that it would sanction individuals and organisations who evade tax and violates the law which makes Tax Clearance Certificate (TCC) a pre-condition for transaction in the capital city.

The FCT Internal Revenue Service issued a circular in early November 2022, informing Ministries, Departments and Agencies of government and commercial banks as well as Area Councils, corporate bodies, and statutory authorities among others to demand and verify TCC from residents before rendering services or performing any transaction.

Some of the affected transactions include; the application for a government loan for industry or business; registration of the motor vehicle; application for foreign exchange or exchange control permission to remit funds outside Nigeria; application for an award of contracts by the Government, its agencies and registered companies; application for certificate of occupancy; application for trade licence among several others.

The minister of the FCT, Muhammad Bello, speaking at a town hall meeting on the implication of non-compliance with the Demand and verification of Tax Clearance Certificate said, “1 use this opportunity to send a note of strong warning to tax evaders to desist from their actions. Not only are their actions morally wrong as they ride on the sweat of others but their actions are also serious criminal offences for which they can face very severe penalties.”

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The minister, who was represented by the FCT permanent secretary, Olusola Adesola
said to provide world class infrastructure for the city, there is a need to greatly improve revenue base which according to him can only be attained by a robust tax policy where all who call FCT home also contribute.

While FCT is currently the second highest internally generating sub-national in the country, the Minister said the city however have the potentials of being number one with a little bit more effort and commitment from residents. “As residents and business owners, you have a sacred responsibility of paying your tax to help the Administration in ensuring the FCT that we desire,” he added.

The minister further assured that government is taking measures to complaints about multiple taxation and other sundry challenges which he said impacts negatively on efforts of encouraging investment in the Territory.

Executive Chairman of the FCT- IRS Haruna Abdullahi, pointed out that the existing law provides that “failure to demand and verify a Tax Clearance Certificate presented by an individual is liable to sanctions and possible conviction with a fine of N5,000,000.00 (Five Million Naira) or three years imprisonment or both the fine and imprisonment”

” I would urge all residents and relevant stakeholders to choose voluntary compliance over compulsion,” he urged.

He informed that individuals and businesses residing in FCT can easily access a Tax Clearance through its effective and efficient channel

The FCT-IRS is keen on easing taxpayer services and in the pursuit of encouraging voluntary compliance, the service has deployed a variety of measures to ease Taxpayer services. We have leveraged Technology to ease tax administration,” he added.

A TCC is a document issued by the relevant Tax Authority to a Taxpayer who has fully complied with his/her tax obligations for the three preceding years of an assessment. Section 85 (2),(4),(5),(6)&(9) of the Personal Income Tax Act (PITA), 2011 (as amended) provides that the Federal Government MDAs and Commercial Banks shall demand for a TCC covering the immediate three years preceding the current year of assessment and shall verify its genuineness by referring same to the issuing Tax Authority.