Nigeria: Not All Bank Account Owners Expected to Fill 'Self-Certification' Forms - FIRS

18 September 2020

Thursday's directive by the Nigerian government for account holders in financial institutions to complete a new "self-certification" form is not for all bank customers, the Federal Inland Revenue Service (FIRS) and tax experts have clarified.

The Nigerian government through its verified handle, @NigeriaGov, had directed all account holders in financial institutions, including banks and insurance companies to obtain, complete and submit the forms to enable financial institutions in Nigeria carry out due diligence in line with extant tax regulations.

Since the announcement, Nigerians have expressed anger over the latest requirement, with most commentators on social media saying it was one requirement too many in view of several such directives previously issued to Nigerians for identification purposes.

Commentators said such was not necessary as Nigerians were already verified through their Bank Verification Numbers (BVN) and other biometric exercises like the driver's license, national identity card numeration, Independent National Electoral Commission (INEC) voters' card and registration, and international passport.

FIRS clarifies

But, the FIRS in a clarification through its verified twitter handle, @firsNigeria, said the requirement was neither for all Nigerians nor for all account holders.

The FIRS said the form is required to be completed by customers of financial institutions who maintain accounts in countries and tax jurisdictions other than Nigeria, for tax and anti-money laundering monitoring purposes.

"This is to clarify that the publication for financial institutions account holders in Nigeria to complete the self-certification form, pursuant to the Income Tax (Common Reporting Standard) Regulations 2019 which is for the fulfilment of Automatic Exchange of Information Requirements.

"The Self Certification form is basically to be administered on Reportable persons holding accounts in Financial institutions that are regarded as "Reportable Financial Institutions" under the CRS (Common Reporting Standard).

"Reportable persons are often non-residents and other persons who have residence for tax purposes in more than one jurisdiction or Country. Financial Institutions are expected to administer the Self Certification form on such account holders when information at its disposal indicates that the Account holder is a person resident for tax purpose in more than one jurisdiction.

"The information that indicates an account holder is a resident for tax purposes in more than one jurisdiction, is expected to be available to Financial Institutions during account opening processes for the KYC (know your customer) and AML (Anti-money laundering) purpose," the FIRS said on Friday.

Tax expert explains

Giving further clarification on the issue, the West Africa Tax Leader, PricewaterCoopers (PwC) Nigeria, Taiwo Oyedele, hailed the exchange of information initiative by the government, saying it would enable the government to obtain information from other countries regarding financial information about Nigerian residents.

"In exchange, the Nigerian government must provide information about persons in Nigeria who are tax residents in other jurisdictions to the relevant countries," he said.

Mr Oyedele, who is also the Fiscal Policy Partner in PwC, however, expressed disappointment that the federal government could not communicate the information to Nigerians more effectively through a more simplified process.

"A simple analogy is like asking everyone to make a self-declaration so that the government can determine how many Nigerians have attended a foreign university onsite when a simple information filtering will show that we need not bother 99% of Nigerians about it.

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"The mere fact that government is asking Nigerians to provide this declaration is a reflection that the country poorly handles data management. The same reason why many countries were able to easily administer palliatives to their citizens during this pandemic and we couldn't," he said.

In the case of corporate accounts, he said the exercise is required to determine the beneficial ownership and control also for reporting purposes. He said the form is for controlling persons, that is, individuals who control 25 per cent or more of the interest in a company, a trustee, settlor or beneficiary of a trust.

Previous communications with taxpayers

The FIRS had earlier shared communications with taxpayers regarding the commencement of exchange of information with other countries.

"We are delighted to inform you that the AEOI-CRS (Automatic Exchange of Information - Common Reporting Standards) System Portal has gone Live.

All Reporting Financial Institutions are expected to file reports on or before 30th September 2020.

The designated official of each Financial Institution is required to enrol on the AEOI-CRS System Portal, as a primary user, to enable the Financial Institution, file its CRS reports.

To enrol as a Primary user and have access to related AEOI-CRS documents, "please visit the FIRS website and navigate the menu tab on Automatic Exchange of Information."

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