Nigerian banks are now requesting that customers applying for forex transactions via a Form A must now provide at least the last 3 years tax clearance certificate.
Nairametrics confirmed this from an email notification from Standard Chartered Bank to its customers.
According to the notice, effective April 1, 2024, all Standard Chartered Bank customers who use Form A for applications are mandated to upload their TCC for the last three assessment years—2021, 2022, and 2023.
This requirement applies to both new and existing Form A applications processed on the Central Bank of Nigeria’s (CBN) trade monitoring system (TRMS).
The bank emphasises that all submitted TCCs will be verified in collaboration with state tax issuing authorities before the approval of any application.
Recommended reading: FCT makes tax clearance certificates mandatory for business transactions
What You Should Know
- Form A is an application form designed by CBN to pay for service transactions (invisible trade) that allows customers to make payments for services such as school fees, technical fees, dividends, airline tickets, loan repayment, judgment debt, personal home remittance, PTA, BTA, among others.
- Banks, such as Fidelity Bank and Stanbic IBTC, have earlier released similar circulars to their customers. Urging them to submit their TCC to get approval for foreign exchange requests, such as Form A applications.
- A Tax Clearance Certificate (TCC) is a document that certifies that a company or individual has settled the income taxes due for the three preceding years of assessment.
- It is a prerequisite for official transactions conducted by a company in the public sector, such as when tendering for government contracts, or when remitting foreign exchange through the banks, among others.
- Company TCCs are issued by the FIRS; while individual TCCs are issued by the relevant State Board of Internal Revenue (SBIR).
- The primary purpose of the TCC is to serve as evidence of compliance with tax obligations, ensuring adherence to the stipulations outlined in Section 85 (2) of the Personal Income Tax Act, Cap P8, LFN 2004 (as amended).
- In January 2023, the Federal Inland Revenue Service (FIRS) said that taxpayers can get their Tax Clearance Certificate in a single click via its flagship Taxpro Maxsolution.