In a move to enhance compliance and regulatory oversight, several banks in Nigeria have implemented new measures requiring customers to provide tax clearance certificates (TCC) for the last three years when applying for Form A, a vital document for foreign exchange transactions.
Form A, established by the Central Bank of Nigeria, facilitates payments for various services such as school fees and medical expenses, enabling customers to purchase funds at the official CBN or interbank rate.
A recent notification from Standard Chartered to its clientele outlined the updated requirement, indicating that starting from next month, applicants seeking forex through banks must submit their TCC for the preceding three years.
The notification, titled ‘Further Update On Tax Clearance Certificate,’ stated, “Effective 1st of April, 2024, you are required to upload your 3 years TCC for 2021, 2022 and 2023 assessment year for all new and existing FORM A applications on the CBN trade monitoring system (TRMS). All submitted TCC will be verified by the state tax issuing authority before the application is approved.”
Echoing this directive, other financial institutions like Fidelity Bank and Stanbic IBTC have issued similar circulars, urging customers to comply with the new requirement to facilitate the approval of foreign exchange requests, particularly Form A applications.
The implementation of these measures underscores the banks’ commitment to ensuring compliance with regulatory guidelines and preventing financial impropriety. A Tax Clearance Certificate serves as concrete evidence of an individual’s or entity’s fulfillment of tax obligations, in line with the provisions of Section 85(2) of the Personal Income Tax Act.
This move is poised to enhance transparency and accountability in forex transactions, as well as bolster confidence in the banking system. It also aligns with broader efforts to promote financial integrity and regulatory adherence within the Nigerian financial landscape.
As customers navigate these new requirements, adherence to tax compliance standards will be paramount to streamline forex transactions and foster a robust financial ecosystem in Nigeria.
The introduction of stricter measures by banks reflects a proactive approach to regulatory compliance and reinforces the importance of upholding tax obligations in facilitating foreign exchange transactions.
