The FIRS in a bid to improve efficiency and effectiveness in the issuance of TCC recently issued a public notice on the timeline within which a TCC application is to be processed by the FIRS. The notice highlights the obligations a taxpayer is expected to meet before obtaining a TCC from the FIRS.

The Federal Inland Revenue Service (FIRS) recently issued a public notice on what taxpayers need to know with respect to applications for tax clearance certificate (TCC).

The Notice states that the FIRS is obligated to issue TCC to qualifying taxpayers not later than two weeks from the date of application. Applicants for a TCC must be registered with valid tax identification number and must have filed necessary returns to date including Companies Income Tax (CIT) and Value Added Tax (VAT). The TCC issued by the FIRS confirms to the holder that all tax liabilities established either by selfassessment or government assessment up to the immediate past year has been settled by the taxpayer.

The FIRS further stated that if a TCC application is not issued within two weeks of the application, the taxpayer should contact the Director of the Efficiency Unit of the FIRS.

Any complainant is to furnish the Efficiency Unit with information relating to the past three years on status and amount of all the relevant taxes, and the nature of assessments that gave rise to the liabilities, that is, whether self-assessment, audit assessment or debt management office assessment.

This public notice is meant to inform taxpayers of their rights and obligations around obtaining a TCC from the FIRS.

Takeaway

There is usually a delay in obtaining TCC from the FIRS. This public notice reinforces the 2-week timeframe for the issuance of a TCC. This is consistent with the provisions of the Companies Income Tax Act (CITA). However the law does not require a taxpayer to prove full compliance with other taxes to be eligible for a TCC. The requirement is limited to Companies Income Tax.

It is not clear whether the FIRS will withhold a TCC where there is an ongoing tax audit or a disputed unpaid tax liability.

In a recent case involving Bottlers who were denied TCC as a result of VAT assessments raised by the FIRS, the Federal High Court ruled in favour of the Bottlers.

It will be interesting to see how the Efficiency Unit of the FIRS will respond to taxpayers on some of these issues going forward. We encourage taxpayers to take advantage of this means to resolve any challenges they face when processing TCC.