Home World News Massive fraud as fake tax clearance certificates proliferate in Nigeria

Massive fraud as fake tax clearance certificates proliferate in Nigeria Updated for 2021

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Updated: February 26, 2021


The Nigerian government announced on Tuesday that it had made a stunning discovery: Companies and individuals that failed to pay taxes had produced their own tax clearance certificates and were presenting them to government agencies as official documents.
The government recently issued tax clearance certificates to companies and individuals that voluntarily disclosed their assets and paid their taxes, and announced that those that can not show a proof of tax compliance would no longer be allowed to do business with the federal government.

As a result of that crackdown that started last year and intensified in January, many companies and individuals apparently began to produce their own tax clearance certificates to continue to milk the government dry.

Why it matters: In Nigeria, there are only about 19 million tax payers out of 70 million companies and individuals who are economically active. Even those who do business with the federal government often do not pay tax. The Nigerian Minister of Finance, Mrs. Kemi Adeosun, thought enough was enough, and launched a crackdown last year.

In a statement on Tuesday, The Ministry of Finance said the Federal Government has mandated all Ministries, Departments and Agencies of government (MDAs), and the Federal Inland Revenue Service (FIRS) to authenticate all Tax Clearance Certificates (TCCs) presented by companies and individuals engaged in public procurement processes.

“This directive is in response to the proliferation of forged TCCs purportedly issued prior to the automation of the certificates from 22nd August, 2017. The validation of the TCCs will enhance the integrity of the tax system,” the minister’s spokesman Oluyinka Akintunde said in a statement.

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A Circular issued on Tuesday by Mrs. Adeosun now requires the MDAs to authenticate all TCCs prior to making any payment. Electronic TCCS (e-TCCs) can be verified via logging into https//tcc.firs.gov.ng and taking the following steps: (click on verify e-TCC, enter the TCC number and complete the captcha, and click on submit to view the TCC number entered).

For TCCs issued before 22 August, 2017, the Circular advised the MDAs and other stakeholders to forward a list of the companies and photocopies of the TCCs to the office of the Executive Chairman of FIRS for authentication. The FIRS has undertaken to verify the TCCs within 72 hours of receipt.

“The Minister reminds Company Directors that possession is an offense. The now outdated manual system allowed production of forged TCCs. Companies and individuals in doubt as to the authenticity of their TCCs are advised to take advantage of the Voluntary Assets and Income Declaration Scheme (VAIDS) to regularise,” the statement said.

Mrs. Adeosun said the Federal Ministry of Finance and the FIRS will continue to work in partnership with government at all levels and stakeholders towards eradicating tax fraud and evasion.

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The Federal Government had in January 2018 directed vendors of MDAs to display their Tax Identification Numbers (TINs) on their invoices before payments are effected. The non-presentation of a TIN by the vendors largely contributed to leakages in revenue remittances, particularly Value Added Tax (VAT) and Withholding Tax (WHT).

Simon Ateba
Simon Ateba
Simon Ateba covers the White House, the U.S. government, the International Monetary Fund, the World Bank and other financial and international institutions for Today News Africa in Washington D.C. Simon can be reached on simonateba@todaynewsafrica.com

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