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Monday, October 2, 2023

To buy dollar at official rate, get your tax clearance certificate!

The Nigerian authorities have rolled out a new directive for applicants wishing to obtain foreign currency from the banks at official rate.

The directive, the latest of several hurdles that Nigerian foreign exchange users have to cross to have access to foreign currencies at official rate, states that in order to gain access to foreign currency at official rate, applicants must attach tax clearance sertificate evidencing tax payment/compliance for three years preceding the current year of assessment or a Tax Exemption Certificate.

A deposit money bank sent this email to customers with regard to the new directive:

Dear Customer,

In accordance with Section 85(2), (4) and (5) of the Personal Income Tax Act 2011 (as amended), please note that customers applying for the purchase of Foreign Exchange for Form A (Invisible), Form Q (SME), Form M (Letters of Credit and Bills for Collection) are now required to submit their Tax Clearance Certificate (TCC) evidencing tax payment/compliance for three (3) years preceding the current year of assessment or a Tax Exemption Certificate.

This is in addition to the existing documents required to be uploaded on the regulatory platform of the Central Bank of Nigeria (CBN).

The notification continues: Kindly note the following:

  • TCC must cover a three-year period preceding the year of the FX application.
  • The Tax Identification Number (TIN) must be visible and legible.
  • The name on the TCC must match the applicant’s name on the CBN Portal.
  • The TCC would be verified by the Bank through the Local Tax Authority.
  • Do note that this is a regulatory requirement for the seamless processing of FX transactions.
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