In a recent development, the Minister of the Federal Capital Territory (FCT), Nyesom Wike, has introduced a new requirement for business transactions in the FCT. He now mandates the demand and verification of Tax Clearance Certificates (TCC) as a pre-condition. This move is aimed at ensuring that businesses operating in the FCT comply with their tax obligations, contributing to the region’s revenue generation.
Chinedum Elechi, who serves as the Mandate Secretary for Economic Planning, Revenue Generation, and Public Private Partnership Secretariat under the FCT Administration (FCTA), made this announcement during a press conference in Abuja on a Monday. This policy change signifies a significant step in the FCT’s efforts to enhance tax compliance and boost the local economy.
Businesses and individuals operating within the FCT will now need to navigate this new requirement, as the FCT Administration takes steps to strengthen its revenue collection and economic planning initiatives.
“I am here today to announce that the Minister of the FCT has approved the implementation of Section 85 of Personal Income Tax Act (PITA) and Section 31 of the FCT Internal Revenue Service Act, 2015.
“Both sections provide for demand and verification of TCC by the Federal Government Ministries, Departments and Agencies (MDAs); commercial banks; and FCT Secretariats, Departments and Agencies (SDAs).
“Implementation of these laws is intended to ensure that all eligible taxpayers in the FCT comply with their tax obligations.
“This will ensure that the FCT Administration gets the required resources it needs to provide essential services to FCT residents,” he said.
“Section 85 of PITA also provides that for purposes of obtaining a TCC, any person who gives incorrect information or obtains a TCC through misrepresentation, forgery or falsification is guilty of an offence.
“Such a person is liable on conviction to a fine of ₦50,000, plus twice the tax payable by him or her, or to imprisonment for three years or to both such fine and imprisonment.
“Similarly, a person, be it a government organisation or corporate entity to whom Section 85 applies, who fails to demand for, or verify a TCC, is guilty of an offence and is liable on conviction to a fine of N5 million, or to imprisonment for three years or both fine and imprisonment,” he said.
The mandate secretary added that Section 31 of the FCT–IRS Act equally makes TCC a pre-condition for transacting any business in the FCT.
He identified some of the transactions that require a TCC as property transactions, certificate of occupancy, registration as a contractor, awards of contracts and building plan approval.
Others are: government licence or permit, application relating to the establishment or conduct of business, FCTA housing loan, motor vehicle registration, registration of distributorship and confirmation of membership of any public board.
Other affected transactions include: registration of a limited partnership, application for market stalls, and appointment or election into public office among others.
“Consequently, all MDAs, commercial banks and SDAs were required to demand and verify TCC from all taxpayers before providing them with any services.
“On behalf of the FCT Administration, we urge all individuals, corporations, corporation-soles, trustees, or executors to ensure that they pay their taxes, obtain their TCCs and present them whenever required,” Elechi said.
According to him, the primary mandate of the government is to provide security and welfare of the people, adding that this cannot be achieved if citizens do not pay their taxes.
“Taxes are essential to the foundation of any government, and it is important that everyone pays their fair share as a civic duty and responsibility,” he added.