CEM REPORT, FINANCE | Nigerians seeking foreign exchange (FX) from commercial banks will now be required to submit valid tax clearance certificates (TCCs) covering three years.
According to a directive by the Central Bank of Nigeria (CBN), the regulation which takes effect today, 1 June 2023, requires that valid tax clearance must precede the current year of assessment.
The apex bank adds that TCC serves as proof of meeting tax obligations and ensures compliance with the provisions of Section 85 (2) of the Personal Income Tax Act 2004 (as amended).
“Effective Thursday, 1 June 2023, customers initiating Form A requests will be required to provide a valid Tax Clearance Certificate (TCC) for the three years immediately preceding the current year of assessment.
“This is in addition to uploading all other required documents on the Central Bank of Nigeria (CBN) Trade Monitoring System (TRMS) portal for Form A requests. This also applies to all requests currently awaiting FX allocation regardless of the stage on the TRMS portal.”
Commercial banks on their part have informed their customers of the directive noting that the new regulation is mandatory.
“In line with regulatory directives, please note that your current tax clearance certificate would now be required for processing the following foreign exchange (FX) transactions; PTA/BTA, school fees, maintenance/upkeep, and medical.
“Consequently, you would be required to upload a copy of your current Tax Clearance Certificate in addition to other required documents on the Central Bank of Nigeria (CBN) Trade Monitoring System (TRMS) portal for Form A requests.
“We understand that this may cause some inconveniences and we sincerely apologise for any strain that this may cause you. However, we are mandated by law to comply with tax regulations to maintain the integrity of the financial system,” a message sent by Fidelity Bank to its customers said.
While some are attributing the regulation to delay tactics over the nation’s forex shortage, others have beckoned state tax offices to shun the temptation of turning tax clearance into money-making avenues on account of the directive.