Yesterday, 17 September 2020, the Federal Inland Revenue Service (FIRS) issued a Public Notice, directing ALL account holders in Financial Institutions (Banks, Insurance Companies, etc) to obtain, complete and submit ‘Self – Certification Forms’ to their respective Financial Institutions.
The same directives were sent out through a series of tweets from @NigeriaGov, the twitter handle of the Federal Government of Nigeria.
Both the FIRS and the Federal Government have now apologised for this directive, clarifying that the ‘Self-Certification form’ is largely for foreigners or people with dual citizenship/ residency, holding accounts with Financial Institutions in Nigeria.
The forms are required by the relevant financial institutions to carry out due diligence procedures in line with the ‘Income Tax (Common reporting Standards) Regulations, 2019.
The ‘Income Tax Regulations’ deal with reporting for financial accounts held by foreigners or people with dual residency in Nigeria. The banks/ financial institutions are required to perform due diligence to identify ‘Reportable Accounts’ (that is accounts of foreign persons to aid Automatic Exchange of Information with other countries) and then submit such reports in the required format, to the FIRS.
However, somewhere in the Regulations, FIRS is still empowered to check all other accounts of the banks/financial institutions to verify that they actually did the due diligence right and submitted all the correct ‘Reportable Accounts’.
Just to stay safe in case of any such unexpected requirements by the tax authorities, we recommend that all taxpayers do their possible best to stay at the right side of tax at all times.