Practical Guide On How Business Owners Can Obtain Tax Clearance Certificate (TCC) With The F.I.R.S - PART 2
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What is the meaning of Taxpayer Identification Number (TIN)?

TIN (Tax Identification Number) is simply a unique number identification issued by the F.I.R.S to identify a person (company or individual) as a registered taxpayer in Nigeria.

It is to be used by the taxpayer alone. It is not transferable. A TIN is primarily issued in order to guide the tax payer in the remittance of his liabilities.

Consider this: commercial banks have been mandated by the CBN to request for the TIN (Tax Identification Number) from customers operating or opening a new corporate accounts before such accounts can become active.

It is also tied to many operations of government. For example, before you are issued a driver’s license you will be required to obtain a TIN.
As we progress, every tax payer will be required to have a TIN because it is only through that the F.I.R.S will be able to maintain a comprehensive database of taxpayers.

One of the major reasons why the TIN is hooked to your company account is because business transactions done in your business name will be captured at the portal of the FIRS and so monies due to the government in the form of withholding taxes and VAT will be adequately captured.

In other words, there is no hiding place for the taxpayer who defaults in making remittances & other appropriate returns to the Government.
TIN registration is a legal obligation of every person who operates a business in Nigeria.

Then, the next question that comes to mind is, of what relevance is the Tax Clearance Certificate (TCC)?

The relevance of a Tax Clearance Certificate (TCC) cannot be underscored.

Go back to the image of the TCC above, you’ll observe that it covers a period of three years in arrears. What this means is that your tax returns are computed on preceding year basis.


What do I mean?

Let’s assume, you applied for a Tax Clearance Certificate in March 2017. The face value of your TCC will reflect taxes paid three years backward excluding the year 2017 in which the application was made.

It will show taxes paid in the year 2014, 2015 & 2016. You won’t be penalised and denied your Tax Clearance Certificate if you are yet to pay your tax for the current year 2017.

This is what is meant by Preceding Year Tax. There’s a formula for computing it.

The points listed below are some of the critical reasons why you need a TCC (Tax Clearance Certificate).
1. Application for certificate of occupancy
2. Application for award of contracts by Government, its agencies and registered companies
3. Application for Government loan for industry or business
4. Application for plot of land
5. Application for import or export license
6. Application for approval of building plans
7. Application for foreign exchange or exchange control permission to remit funds outside Nigeria
8. Registration of Motor Vehicle
9. Application for registration as a contractor
10. Confirmation of appointment by Government as chairman or member of a public board, institution, commission, company or to any other similar position made by the Government
11. Appointment or election into public office
12. Stamping of guarantor’s form for a Nigerian passport
13. Application for transfer of real property
14. Application for trade license
15. Application for pools or gaming license
16. Application for firearms license
17. Application for agent license
18. Application for distributorship
19. Application for allocation of market stalls
20. Application for change of ownership of vehicle by the vendor
21. Application for registration of a limited liability company
22. Any other transaction as may be determined from time to time.

I hope this helps.

Watch out for Part 3 of this series.


Chidera ANELE
Accounting |Tax Solutions| ERP Consultant| Real Estate

thanks for the info, but i will like to be clarified on the following

i had my company registered this year january, and i got my TIN which enabled me to open an account with it, this same year, the company is 7 months old as at the time of making this enquiry, can i at this point apply for TCC?