Welcome to Tax Education & Awareness Centre


Gain access to education and awareness materials, interact with us, submit ideas and obtain the help and assistance you need to work with us in making Edo state greater.

FAQ's

How can I obtain a TCC?

A tax clearance certificate can be obtained upon request as long as the applying individual has remitted his/her taxes to the EIRS for the three (3) years immediately preceeding the current year of assessment.

How much is a Tax Clearance Certificate (TCC)?

TCC is not paid for, but the taxpayer must have fully met his/her tax obligations to the Federal/ State Government for a period of three (3) years before applying for a TCC, upon which the tax authority issues the TCC. 

If I live in Delta State, but work in Edo State, what tax authority will be responsible for issuing me a TCC?

The Tax authority where the taxpayer is registered for tax purposes and has been paying his taxes is responsible for the issuance of TCC.

What is TCC used for?

Section 85(4) of the Personal Income Tax Act as amended, lists Tax Clearance Certificate as necessary for, but not limited to the following reasons:

·      For doing business or registration of a company with other corporate entities in Nigeria, be it a private or public organization;

·         Application for Government loan for industry or business;

·         Registration of motor vehicle;

·         Application for firearms licence;

·    Application for foreign exchange or exchange control permission to remit funds outside Nigeria;

·         Application for certificate of occupancy;

·     Application for awards of contracts by Government, its agencies and registered companies;

·         Application for approval of building plans;

·         Application for import or export licence;

·         Application for agent licence;

·         Application for pools or gaming licence;

·         Application for registration as a contractor;

·         Application for distributorship;

·         Application for transfer of real property;

·         Application for allocation of market stalls;

·         Confirmation of appointment by Government. (Federal, State or Local Government)

·         Contesting for public office in form of election in Federal, State and Local.

·         Application for change of ownership of property (Land, house, vehicle etc.);

·         Application for a plot of land;

·         Any other transactions as may be determined.

Can I assess myself to Tax under Direct Assessment?

With Direct Assessment, a taxpayer can assess him/herself and proceed to pay the calculated tax at designated banks as long as the guidelines to self-assessment are followed. 

How can I verify the authenticity of TCC issued to me?

TCC can be verified by visiting the nearest Revenue Service office or by contacting the service’s call centre.  

Is it possible to apply for a refund for excess PIT deductions/payments?

Yes, the law provides that excess tax paid by any employee shall be refunded on application by the employee with the option of electing to use the excess payment to set-off future tax liability.

 

Is the submission of comprehensive list of staff with PAYE deductions different from submission of annual returns?

Yes, Comprehensive list of employees with PAYE deductions (remittance schedule) is continuously submitted on monthly basis each time PAYE is being remitted to EIRS, while annual returns (form H1) is to be submitted by 31st day of January of every year by every employer to enable the Tax Authority ascertain whether the correct deductions and payments of tax have been made for the previous year (period of twelve months) for all its employees.

Is there a Penalty for Failure to File my Returns?

Yes, the penalty for failure to file returns according to the Personal Income Tax (Amendment) Act, 2011 is N500,000 for corporate organizations and N50,000 for individuals.


 

Under what condition can I be denied being issued a TCC?

A TCC request can be rejected/denied under the condition where the taxpayer still has an outstanding liability to pay. 

What are non-taxable deductions under PIT Act?

The Sixth schedule of PITA as amended specifies the following as tax exempt:

                        a) National Housing Fund contributions

                        b) National Health Insurance Scheme contributions

                        c) Life Assurance Premium

                        d) National Pension Scheme

                              e) Gratuities

What are the Current Tax Rates Applicable on Taxable Income?

The current rates applicable to the taxable or chargeable income are as follows:

 First                N300, 000.00 @ 7%

 Next                N300, 000.00 @ 11%

 Next                N500, 000.00 @ 15%

 Next                N500, 000.00 @ 19%

 Next                N1, 600,000.00 @ 21%

 Above              N3, 200,000.00 @ 24%

 

What information does a TCC carry?

A TCC shall disclose in respect of the last three years of assessment the following information-

Name and address of Taxpayer

Total assessable income;

Years of Assessment;

Tax paid;

Number and date of receipt

 Source of income;

 Taxpayer Identification Number (TIN);

Date of issuance;

Expiration date ;

Signature of authorized officer/officers, etc

What is Benefit-in-Kind?

Benefit-in-kind may be defined as those benefits or perquisites that accrue to a person by reason of office and/or position he/she occupies. Benefits-in-kind include such benefits as official car, official accommodation, cooks, gardeners, securities etc.  It is taxable after certain deductions/reliefs are granted.

What is Direct Assessment?


Direct Assessment is a method under the Personal Income Tax used to assess the income of self-employed individuals to tax.

What is gross emolument/salary?

Personal Income Tax Act (PITA) as amended defines Gross Emolument as the aggregate of wages, salaries, allowances (including benefits-in-kind), gratuities, superannuation and any other income derived solely by reason of employment.

What is P. A. Y. E?

P. A. Y. E. is an acronym for “Pay As You Earn”. It is a method of collecting personal income tax from employee's salaries and wages through deduction at source by an employer as provided by the relevant sections of Personal Income Tax Act (PITA). (S.81 of Personal Income Tax Act Cap P8 LFN 2004)

What is TCC?

Tax Clearance Certificate (TCC) is an official document issued by the relevant tax authority e.g. Edo State Internal Revenue Service (EIRS) showing that a taxpayer’s affairs in the three (3) years preceeding the current year are in order.

What is the current relief claimable under Personal Income Tax Act?

The Personal Income Tax Act (PITA) as amended provides for Consolidated Relief Allowance (CRA) of N200, 000.00 subject to a minimum of 1% of gross income, whichever is higher plus 20% of gross income and the balance shall be taxable in accordance with the tax rates in schedule six (6) of the Act

What is the deadline for filing end of year Tax Returns under PAYE?

The deadline for filing of end of year tax returns for PAYE is the 31st of January of every year

What is the deadline for Filing of Tax Returns under Direct Assessment?

The deadline for filing of tax returns under Direct Assessment is the 31st of March every year.

What is the due date for remitting PAYE Tax?

The due date for remitting PAYE tax is the 10th day of the preceding month after deductions.

What is the duration for the issuance of a TCC?

Tax Clearance Certificate is issued by the relevant state tax authority to a taxpayer within two (2) weeks of demand for the certificate as long as the taxpayer has satisfied the requirements for issuance of TCC. 

What is the minimum tax rate for Personal Income Tax?

The minimum tax rate is 1% of total income. It is applicable where the tax assessed is less than 1% of gross income.

What is the tax implication of giving new/used vehicles to staff for use in an organization?

This is treated as benefit – in – kind. 5% of the value of the vehicle is calculated and added back to the income of staff and taxed. 

When there is under deduction of tax in the employee’s income, who bears the burden of the under deduction?

When there is an under deduction of tax in staff salary, the employer of labour is liable for improper tax deductions with interest and penalty.

Where should PAYE deductions of staff working in Kogi state but residing in Igarra, Edo State be remitted to?

By residency rule, an employee’s PAYE tax is payable to the tax authority of the state of his/her residence. It is therefore the duty of the employer to deduct and remit it to the tax authority where the employee is resident. If the employee is resident in Igarra, the tax authority that is entitled to his PAYE tax is the Edo State Internal Revenue Service. If he is however resident in Okene, Kogi State the tax authority will be the Kogi State Board of Internal Revenue.

Why Do PAYE Tax vary from Ministries to Ministries for the same level of Income/Salary?

PAYE tax does not differ because the rates used for computation are the same.