NEWS DIGEST– The Minister of the Federal Capital Territory (FCT), Nyesom Wike, has mandated the demand and verification of Tax Clearance Certificate (TCC) as a pre-condition for business transactions in the FCT.
This announcement was made by Mr Chinedum Elechi, the Mandate Secretary, Economic Planning, Revenue Generation and Public Private Partnership Secretariat, FCT Administration (FCTA) at a press conference in Abuja on Monday.
“I am here today to announce that the Minister of the FCT has approved the implementation of Section 85 of Personal Income Tax Act (PITA) and Section 31 of the FCT Internal Revenue Service Act, 2015.
“Both sections provide for demand and verification of TCC by the Federal Government Ministries, Departments and Agencies (MDAs); Commercial banks; and FCT Secretariats, Departments and Agencies (SDAs).
“Implementation of these laws is intended to ensure that all eligible taxpayers in the FCT comply with their tax obligations.
“This will ensure that the FCT Administration gets the required resources it needs to provide essential services to FCT residents,” he said.
According to Elechi, the minister has approved the implementation of Section 85 of Personal Income Tax Act (PITA) and Section 31 of the FCT Internal Revenue Service Act, 2015. The said sections provide for the demand and verification of TCC by the Federal Government Ministries, Departments, and Agencies (MDAs), Commercial banks, and FCT Secretariats, Departments, and Agencies (SDAs).
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The implementation of the above-detailed laws is intended to ensure that all eligible taxpayers in the FCT comply with their tax obligations. Speaking on the matter, Mr Elechi explained that Section 85 of the Personal Income Tax Act, 2011, provides that MDAs or a commercial bank demand for TCC when transacting with any person as specified by the law.
He added that the TCC would cover the immediate past three years preceding the current year of assessment. He further said that MDAs or commercial banks shall also verify the authenticity of the tax clearance certificate by the issuing tax authority before carrying out any of the transactions.
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“Section 85 of PITA also provides that for purposes of obtaining a TCC, any person who gives incorrect information or obtains a TCC through misrepresentation, forgery or falsification is guilty of an offence.
“Such a person is liable on conviction to a fine of N50,000, plus twice the tax payable by him or her, or to imprisonment for three years or to both such fine and imprisonment.
“Similarly, a person, be it a government organisation or corporate entity to whom Section 85 applies, who fails to demand for, or verify a TCC, is guilty of an offence and is liable on conviction to a fine of N5 million, or to imprisonment for three years or both fine and imprisonment,” he said.
While discussing the consequences of failure to comply with the rules, Elechi stated that Section 85 of PITA provides criminal sanctions for offences such as giving incorrect information, obtaining a TCC through misrepresentation, forgery, or falsification. Such an offender is liable on conviction to a fine of N50,000, plus twice the tax payable, or to imprisonment for three years or both such fine and imprisonment.
Similarly, a person liable to demand for, or verify a TCC, who fails to do so is also guilty of an offence and is liable on conviction to a fine of N5 million, or to imprisonment for three years or both fine and imprisonment.
Section 31 of the FCT – IRS Act also makes TCC a pre-condition for transacting any business in the FCT. Some of the transactions requiring a TCC include property transactions, certificate of occupancy, registration as a contractor, awards of contracts, and building plan approval.
Others are government licence or permit, application relating to the establishment or conduct of business, FCTA housing loan, motor vehicle registration, registration of distributorship, and confirmation of membership of any public board.
As a result, all MDAs, commercial banks, and SDAs have been required to demand and verify TCC from all taxpayers before providing them with any services. According to Elechi, this move will ensure that the FCT Administration gets the required resources it needs to provide essential services to FCT residents.
The mandate secretary also addressed concerns that some taxpayers might face challenges in obtaining TCCs, stating that the FCT Administration is working on initiatives to increase compliance and ease the process of obtaining TCCs.
