NEW PROCESS FOR ACQUIRING AND GENERATING TAX CLEARANCE CERTIFICATES INTRODUCED BY LIRS

The Lagos State Internal Revenue Service (LIRS) has released a Public Notice outlining the steps for taxpayers in Lagos State to obtain the new electronic Tax Clearance Certificate (eTCC) through its end-to-end tax administration (eTax) platform. The eTCC has a unique Certificate Number and QR Code, which serve as security features to prevent fraud and guarantee authenticity.

The LIRS encourages all government Ministries, Departments and Agencies (MDAs), and commercial banks to request and verify the eTCC using the security features before engaging in any business with individual residents in the State, in line with Section 85(2) of the Personal Income Tax (PIT) Act (as amended).

To generate the eTCC, a taxpayer must satisfy the following tax compliance requirements in the State:

1. Maintain an updated profile on the eTax platform with recent passport photographs and address information.
2. For the past three years, file annual income tax returns (including employer-submitted annual tax returns).
3. Receive tax assessments from the LIRS for the above returns and make complete payments of all taxes due on returns.

Taxpayers who have fulfilled the above requirements can download their eTCC by following these steps:

• Log in as an individual taxpayer and click on the “DOWNLOAD TCC” icon on the profile page. This will redirect you to the TCC checklist page.
• Review the TCC checklist to confirm that the above compliance requirements have been fulfilled.
• Once all conditions are met, the taxpayer will be directed to a new page to preview a copy of the TCC. The taxpayer cannot preview the TCC if there are any outstanding issues on the checklist.
• Confirm the information on the TCC, including the image, employer details (if applicable), occupation information, certificate number, scannable barcode, total income, and tax paid, for accuracy and completeness.
• Download a softcopy or print a hard copy of the TCC.

For inquiries on e-TCC application, e-Tax, and other related issues, taxpayers may contact etaxinfo@lirs.net or the dedicated customer service hotline, 0700-2255-5477.

KPMG Commentary

A Tax Clearance Certificate (TCC) is a formal document issued by the relevant tax authority to a taxpayer, verifying that the taxpayer has fulfilled his/her civic obligation for the specified period in the certificate. According to Section 85(1) of the PIT Act (as amended), the relevant tax authority must issue a TCC to a taxpayer within two weeks of application, provided the taxpayer has fully paid income tax for the three years immediately preceding the current year of assessment, or has no tax due from his/her income, or is not liable to tax for any of the three years.

Section 85(2) and (4) of the PIT Act (as amended) requires MDAs and commercial banks to request a valid copy of TCC from individuals, partnerships (in respect of their partners), and enterprises to process their applications for government licenses, permits, and certificates. Therefore, given its significance, the LIRS has taken the commendable step of utilizing technology to fully automate and digitize the TCC application process, enabling compliance with the Act’s timelines.

The new TCC’s embedded security features are expected to reduce the incidence of fraud in TCC application processing and simplify tax administration in the State. The compliance checklist feature will provide taxpayers with a snapshot of any pending issues delaying the TCC application. It will also improve voluntary compliance and ensure the prompt issuance of TCC to taxpayers who have met their tax obligations, as stipulated in Section 85(1) of the PIT Act (as amended).

Therefore, individuals residing in Lagos State must ensure that their information on the eTax platform is up-to-date as outlined in the Public Notice. If there are any outstanding assessments or issues, they should take proactive steps to address them with the LIRS, resolve any outstanding liabilities that arise from them, and obtain their TCC from the platform when needed.

Comments

comments