How to Get Tax Clearance Certificate in Nigeria – 2024 (Ultimate Guide)
Introduction
In Nigeria, it is the responsibility of Federal Inland Revenue Service or State Inland Revenue Services to issue tax clearance certificate to applicants. A tax clearance is a certificate stating that an individual or a corporation has no tax due for a particular period of time. The certificate is an evidence that applicant paid for tax.
Tax Clearance Certificate when issued to the taxpayers enable them to, inter alia, seek and obtain contracts and loans, renew permits, registrations, franchises, agreements and/or licenses that will invariably generate revenue from which taxes will be paid, management has taken steps to ease the process of obtaining TCC.
What is a Tax Clearance Certificate (TCC)?
A Tax Clearance Certificate (TCC) is an official document issued by the Federal Inland Revenue Service (FIRS) or the State Internal Revenue Service (SIRS) that certifies a taxpayer has met their tax obligations for a specific period, usually three years.
It is required for various business and personal transactions, including:
Business registration and renewal
Government contracts and tenders
Visa applications
Loan applications
Import and export licenses
Without a valid TCC, individuals and businesses may face restrictions in conducting major transactions in Nigeria.
Who Needs a Tax Clearance Certificate in Nigeria?
Obtaining a TCC is mandatory for:
Limited Liability Companies (LLCs) – Required by the Corporate Affairs Commission (CAC) for business registration and compliance.
Self-Employed Individuals & Professionals – Lawyers, doctors, consultants, and other professionals must show tax compliance.
Non-Profit Organizations (NGOs) – NGOs must prove they have remitted necessary taxes such as Pay As You Earn (PAYE) for employees.
Foreign Investors and Companies – Required for securing business permits and executing financial transactions.
Individuals Applying for Visas – Certain embassies require a TCC to verify financial credibility.
OLD PROCESS/PLATFORM FOR OBTAINING A TAX CLEARANCE CERTIFICATE IN NIGERIA:
Step1. The first step is to get in touch with FIRS and register your company.
Step 2. Hire a Consultant.
Step 3. Incorporate your Company.
Step 4. Provide Audited books of Accounts.
Step 5. Include an estimated computation Tax payable statement.
Step 6. Fill the Tax clearance forms.
Step 7. Submit the relevant Documents.
Step 8. Payment for the Certificate and be issued with the company Tax Clearance Certificate.
NEW PROCESS/PLATFORM FOR OBTAINING A TAX CLEARANCE CERTIFICATE IN NIGERIA:
The Federal Inland Revenue Service (FIRS) has recently migrated to a new online Tax Clearance Certificate (TCC) application portal.
All taxpayers i.e. both those whose TCC applications are under processing under the old platform and those making new TCC applications under the new platform, are required to reapply/apply by submitting a taxpayer data update form.
Application for company Tax Clearance Certificate – allow up to 10-15 working days for processing.
The tax is collected on behalf of the Government by businesses and organizations which have registered with the Federal Inland Revenue Services (FIRS) for VAT purposes.
Application for personal or individual Tax Clearance Certificate application is made to the State Inland Revenue Service, while Business or Company Tax Clearance Certificate application is made to the Federal Inland Revenue Service (FIRS).
The Electronic Tax Clearance Certificate (e-TCC) is now a new system of issuing tax clearance certificates in Lagos State. It replaces the old paper and manually processed Tax Clearance Certificate (TCC).
Application for Business or Company employees, registered under the Pay As You Earn (PAYE) scheme:
Process the application for your employees as a group, rather than personal or individual application to the State Inland Revenue Service.
Challenges Faced When Applying for a Tax Clearance Certificate
Incomplete Tax Records – Many businesses fail to maintain proper tax records, leading to delays.
Outstanding Tax Liabilities – Failure to remit taxes on time results in penalties.
Bureaucratic Delays – The process may be slow due to administrative bottlenecks.
Incorrect TIN Registration – Mistakes in TIN details can delay approval.
Legal Framework Governing Tax Clearance in Nigeria
The issuance of Tax Clearance Certificates is backed by various laws, including:
Personal Income Tax Act (PITA) 2011 (as amended) – Regulates income tax for individuals.
Companies Income Tax Act (CITA) – Governs taxation for corporate entities.
Federal Inland Revenue Service (Establishment) Act, 2007 – Grants FIRS power to issue TCCs.
Value Added Tax Act (VAT Act) 2007 – Ensures VAT compliance before issuing TCC.
Case Law Example:
In FIRS v. Halliburton West Africa Ltd (2015) LPELR-41217, the court ruled that companies must fulfill tax obligations before seeking legal redress on tax matters, reinforcing the importance of a TCC.
Benefits of Having a Tax Clearance Certificate in Nigeria
✔ Legal Compliance – Avoid penalties and ensure smooth business operations.
✔ Access to Government Contracts – A mandatory requirement for public tenders.
✔ Visa Applications – Essential for proof of financial credibility.
✔ Better Business Reputation – Increases trust with clients and investors.
✔ Loan Approvals – Banks often require a TCC before granting credit.
Conclusion
Getting a Tax Clearance Certificate in Nigeria in 2024 is no longer as complicated as before, thanks to digital platforms like the TaxPro-Max portal. However, ensuring tax compliance remains the key to a seamless application process, allowing businesses and individuals to apply for their TCCs without unnecessary delays. However, the key to a seamless application remains timely tax compliance. Filing returns on time, keeping proper records, and ensuring tax payments are up to date will prevent setbacks during the TCC application process.
For businesses, a valid TCC is more than just a regulatory requirement—it is a testament to credibility, financial discipline, and compliance with Nigerian tax laws. Companies without an up-to-date TCC risk being barred from government contracts, denied access to financial assistance, and even facing legal consequences. If you are unsure about any aspect of obtaining a TCC or require professional guidance, CHAMAN Law Firm is here to assist. Our team of experts ensures you remain tax-compliant while focusing on growing your business. Contact us today for expert legal support!