THE USES OF TAX CLEARANCE CERTIFICATE IN NIGERIA.
Table of Contents
The Uses Of Tax Clearance Certificate In Nigeria.- Related are; what are the uses of tax clearance certificate, tax clearance certificate for individuals, personal income tax clearance certificate in Nigeria, tax clearance certificate for companies.
In the first place, Tax Clearance Certificate is issued by the relevant tax authority, that is Federal inland Revenue Service for companies or States Internal Revenue Service for individuals. Tax Clearance certificate shows the tax position of the taxpayer in question.
THE USES OF TAX CLEARANCE CERTIFICATE IN NIGERIA.
Application for Tax Clearance Certificate:
Incidentally, it is only issued on the application of such a tax payer. To issue it the tax authority must be satisfied that the tax assessed on the income of the tax payer for the 3 years immediately preceding the current year of assessment has been fully paid. It is issued within two weeks of its demand.
What is the content of Tax Clearance Certificate?
Consequently,it shall disclose in respect of the three years of assessment:
– The name, address and TIN of the taxpayer.
– The chargeable income
– The tax payable,
– The Tax paid,
– Nature of business,
– Type of assessment (BOJ or self assessment)
– Date of issue
– The tax authority stamp and officials signature,
– Expiry Date.
THE USES OF TAX CLEARANCE CERTIFICATE IN NIGERIA.
READ ALSO: How to get Company Ta Clearance Certificate
Why Do I need Tax Clearance Certificate?
The law requires that any Ministry, Departments, Agencies, or commercial banks, that deals with a taxpayer in certain transactions must demand for a current/valid Tax clearance certificate. The transactions as contained in the tax laws are:
1 Application for government loan for industry or business,
2. Registration of motor vehicles,
3, Application for firearms licence,
4.Application for foreign exchange,
5. Application for exchange control permission to remit funds outside Nigeria,
6, Application for certificate of occupancy,
7. Application for award of government contracts,
8. Application for approval of building plans,
9, Application for trade licence,
10, Application for transfer of real property,
11. Application for import or export licences,
12. Application for agent licence,
13. Application for pools or gaming licence,
14, Application for registration of a contractor.,
15. Application for distributorship,
16. Confirmation of membership of a government institution board,
17, Stamping of guarantor’s form for Nigerian Passport,
18. Application for registration of a company or business name.
19. Application for allocation of market stalls.,
20. For election into public office
21. For contesting political elective positions.
THE USES OF TAX CLEARANCE CERTIFICATE IN NIGERIA.
TAX AND ECONOMIC DEVELOPMENT:
Why are we compelled to pay taxes? How does Taxation affect Economic Development of a nation?
Taxes are required by every government to generate revenue to run its budget for a stated period usually a year. Taxation is one of the fiscal policies through which every government regulates certain aspects of the economy.
THE USES OF TAX CLEARANCE CERTIFICATE IN NIGERIA.
The three Fiscal policy tools usually employed are government spending, taxation and transfer payments which are used to influence aggregate demand.
Taxation if properly implemented is made to affect the total volume of production, consumption, investment (through tax incentives), choice of industrial location and techniques, distribution of income (income re-distribution), fight inflation, regulate foreign trade to secure favourable balance of trade ( balance of payment) etc. with other nations.
Now you understand why you must need tax clearance certificate for certain business in Nigeria. It is to compel you pay your tax. That is a major use of tax clearance in Nigeria.
Deacon Anekperechi Nworgu, a seasoned economist who transitioned into a chartered accountant, auditor, tax practitioner, and business consultant, brings with him a wealth of industry expertise spanning over 37 years.
