The uses of tax clearance certificate that you should know.
CHAMAN LAW FIRM
3/7/2022 2 min read
WHAT ARE THE USES OF TAX CLEARANCE CERTIFICATE
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 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 license,
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 license,
10. Application for transfer of real property,
11. Application for import or export licenses,
12. Application for agent license,
13. Application for pools or gaming license,
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 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 favorable 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.
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.
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,