Nigerian Banks Mandate Three-Year Tax Clearance Certificates for Form A Forex Transactions

Nigerian banks are now asking customers who want to apply for foreign exchange transactions using Form A to provide their tax clearance certificates for the past three years.

This new requirement was confirmed by Nairametrics through an email sent by Standard Chartered Bank to its customers.

Starting April 1, 2024, all Standard Chartered Bank customers using Form A for transactions must upload their tax clearance certificates for the years 2021, 2022, and 2023.

This rule applies to both new and existing Form A applications processed on the Central Bank of Nigeria’s trade monitoring system (TRMS).

The bank has made it clear that all submitted tax clearance certificates will be checked with state tax authorities before any application is approved.

What You Need to Know:

Form A is a CBN application form used for paying for service transactions like school fees, dividends, airline tickets, loan repayments, and personal remittances.

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.