Tax Clearance Certificate

TAX – Nov 2014 – L2 – Q6 – Tax Administration and Enforcement

Draft an objection letter addressing a Best of Judgment assessment and provide relevant tax liability calculations for Osondu Bako Company Ltd.

Question

Osondu Bako Company Limited has been in business for many years as a general business entrepreneur.

The Company prepares its accounts to 31 December of every year. The Company, however, submitted its audited Financial Statements for the year ended 31 December 2012 on 27 May 2013.

The Company applied for a Tax Clearance Certificate on 26 August 2014, but the issuance of the certificate was delayed by the Revenue. Instead of issuing the Tax Clearance Certificate, a Best of Judgment assessment of N3,450,000 was raised on the company.

The date on the Notice of Assessment was 30 May 2014, but it was served on the company on 31 August 2014.

Stated below is information relating to the financial statements of the company for the year ended 31 December 2012:

Financial Statement Item	Naira (N’000)
Profit per Accounts	3,400
Depreciation	380
Capital Allowances agreed with Revenue	590
Revenue	12,050
Net Assets	8,400
Gross Profit	960
Share Capital	10,000

The company paid all the tax liabilities. Despite this, the Chief Executive Officer was surprised and concerned upon receiving the Notice of Best of Judgment Assessment from the tax authority. Consequently, you have been engaged by the company as a Tax Consultant.

You are required to:

Write a Letter of Objection to the Tax office in respect of the Best of Judgment Assessment along with relevant workings.
(15 Marks)

Answer

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Tags: Best of Judgment Assessment, Tax Administration, Tax Clearance Certificate, Tax Objection
Level: Level 2

Topic: Tax Administration and Enforcement

TAX – May 2017 – L2 – SB – Q2 – Tax Administration and Enforcement

Explanation of transactions requiring a Tax Clearance Certificate and the procedures for hearing an appeal before the Tax Appeal Tribunal.

Question

a. Mr. Bull Dozer has just submitted his application for an export license to the Nigerian Export Promotion Council. The Council demanded a Tax Clearance Certificate before granting him the export license.

Mr. Bull Dozer was concerned and approached you to explain whether the presentation of this document is required for all government transactions in Nigeria.

Required:
State TEN transactions in respect of which a Tax Clearance Certificate may be demanded by a government agency. (10 Marks)

b. The Tax Appeal Tribunal has the authority to adjudicate on tax disputes and controversies when the appellant does not discontinue the appeal.

Required:
List TEN procedures for hearing the appeal before the Tax Appeal Tribunal. (10 Marks)

Answer

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Tags: Government Transactions, Nigeria, Tax Appeal Tribunal, Tax Clearance Certificate, Tax Dispute Resolution
Level: Level 2

Topic: Tax Administration and Enforcement
Series: MAY 2017

TAX – Nov 2015 – L2 – Q3 – Personal Income Tax (PIT)

This question involves computing the personal income tax liability of an employee for two consecutive years.

Question

Mr. Babangida Muhammed was employed as General Manager by Casio Nigeria Limited, a subsidiary of a United Kingdom-based holding company. He commenced the employment on 1 January 2013. He has provided the following details:

	2013 (₦’000)	2014 (₦’000)
Basic salary	5,400	6,000
Rent subsidy	1,800	1,800
Furniture grant	600	600
Entertainment allowance	660	660
Other benefits
– Brand new car (valued at)	3,800,000
– Scholarship for children	500	500

Mr. Babangida Muhammed has approached your firm to assist him in determining his personal income tax liability for the last two years and assist in obtaining a current Tax Clearance Certificate on his behalf from his relevant tax authority. Your firm is also to determine whether he had underpaid his tax for the previous two years and if so, how much additional tax he may be required to pay.

Additional information provided:

Income/Expense Category	2013 (₦’000)	2014 (₦’000)
Gratuity from former employment	240	–
Rental income (Gross)	600	600
Interest on Fixed Deposit	75	90
Life Assurance Premium	100	100
Contribution to NHF (2.5% of Basic Salary)	2.5%	2.5%
Contribution to National Pension Scheme (7.5% of Total Emoluments)	7.5%	7.5%
Repair expenses for property	–	45
Maintenance of aged parents	480	–
Personal Income Tax paid	850	960

Required:
a. The Personal Income Tax payable in 2013 and 2014 Years of Assessment.
(16 Marks)
b. The effect of previous payments on the tax payable.
(4 Marks)
(Total: 20 Marks)

Answer

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Tags: Allowances, Emoluments, Income Sources, Personal income tax, Tax Clearance Certificate, Tax Liability
Level: Level 2

Topic: Personal Income Tax
Series: NOV 2015

TAX – Nov 2020 – L1 – SA – Q6 – Tax Administration and Enforcement

: State the contents of a tax return, conditions for TCC issuance, and transactions requiring TCC.

Question

All limited liability companies in Nigeria shall at least once in a year without notice or demand from the Federal Inland Revenue Service (FIRS), file a return with the FIRS in a prescribed form which contains the relevant information and documents.

In Nigeria, a tax clearance certificate (TCC) is issued only upon the application by the taxpayer. Therefore, in issuing the certificate, the relevant tax authority would have satisfied itself that the tax assessed on the income of the applicant for the three years immediately preceding the current year of assessment has been fully paid, or that no tax is due on such income, or that the applicant is not liable to tax for any of the three years.

Required:
a. State FOUR contents of a tax return. (8 Marks)
b. State THREE conditions precedent for the issuance of a TCC. (6 Marks)
c. State SIX transactions for which a TCC is required. (6 Marks)

Total: 20 Marks

Answer

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Tags: Nigerian Tax System, Required Transactions, Tax Clearance Certificate, Tax Return, TCC Conditions
Level: Level 1

Topic: Tax Administration and Enforcement
Series: NOV 2020

TAX – May 2019 – L2 – Q7b – Tax Administration and Enforcement

Identify the types of information disclosed in a tax clearance certificate.

Question

Identify four types of information that are expected to be disclosed in a tax clearance certificate.

Answer

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Tags: Disclosure Requirements, Tax Clearance Certificate, Tax Compliance
Level: Level 2

Topic: Tax Administration and Enforcement
Series: MAY 2019

PT – March 2023 – L2 – Q5a – Tax Administration

State the transactions that require the use of a Tax Clearance Certificate (TCC).

Question

In 2021, the Ghana Revenue Authority migrated fully to an online portal for the filing and payment of taxes. One process included in this migration was the obtainment of a Tax Clearance Certificate (TCC), which plays an important role in tax compliance.

Required:

State SIX (6) transactions that require the use of a TCC.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Compliance, Tax Administration, Tax Clearance Certificate, TCC
Level: Level 2

Topic: Tax Administration
Series: MAR 2023

TAX – Nov 2014 – L2 – Q6 – Tax Administration and Enforcement

Draft an objection letter addressing a Best of Judgment assessment and provide relevant tax liability calculations for Osondu Bako Company Ltd.

Question

Osondu Bako Company Limited has been in business for many years as a general business entrepreneur.

The Company prepares its accounts to 31 December of every year. The Company, however, submitted its audited Financial Statements for the year ended 31 December 2012 on 27 May 2013.

The date on the Notice of Assessment was 30 May 2014, but it was served on the company on 31 August 2014.

Stated below is information relating to the financial statements of the company for the year ended 31 December 2012:

Financial Statement Item	Naira (N’000)
Profit per Accounts	3,400
Depreciation	380
Capital Allowances agreed with Revenue	590
Revenue	12,050
Net Assets	8,400
Gross Profit	960
Share Capital	10,000

You are required to:

Write a Letter of Objection to the Tax office in respect of the Best of Judgment Assessment along with relevant workings.
(15 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Best of Judgment Assessment, Tax Administration, Tax Clearance Certificate, Tax Objection
Level: Level 2

Topic: Tax Administration and Enforcement

TAX – May 2017 – L2 – SB – Q2 – Tax Administration and Enforcement

Explanation of transactions requiring a Tax Clearance Certificate and the procedures for hearing an appeal before the Tax Appeal Tribunal.

Question

Mr. Bull Dozer was concerned and approached you to explain whether the presentation of this document is required for all government transactions in Nigeria.

Required:
State TEN transactions in respect of which a Tax Clearance Certificate may be demanded by a government agency. (10 Marks)

b. The Tax Appeal Tribunal has the authority to adjudicate on tax disputes and controversies when the appellant does not discontinue the appeal.

Required:
List TEN procedures for hearing the appeal before the Tax Appeal Tribunal. (10 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Government Transactions, Nigeria, Tax Appeal Tribunal, Tax Clearance Certificate, Tax Dispute Resolution
Level: Level 2

Topic: Tax Administration and Enforcement
Series: MAY 2017

TAX – Nov 2015 – L2 – Q3 – Personal Income Tax (PIT)

This question involves computing the personal income tax liability of an employee for two consecutive years.

Question

	2013 (₦’000)	2014 (₦’000)
Basic salary	5,400	6,000
Rent subsidy	1,800	1,800
Furniture grant	600	600
Entertainment allowance	660	660
Other benefits
– Brand new car (valued at)	3,800,000
– Scholarship for children	500	500

Additional information provided:

Income/Expense Category	2013 (₦’000)	2014 (₦’000)
Gratuity from former employment	240	–
Rental income (Gross)	600	600
Interest on Fixed Deposit	75	90
Life Assurance Premium	100	100
Contribution to NHF (2.5% of Basic Salary)	2.5%	2.5%
Contribution to National Pension Scheme (7.5% of Total Emoluments)	7.5%	7.5%
Repair expenses for property	–	45
Maintenance of aged parents	480	–
Personal Income Tax paid	850	960

Required:
a. The Personal Income Tax payable in 2013 and 2014 Years of Assessment.
(16 Marks)
b. The effect of previous payments on the tax payable.
(4 Marks)
(Total: 20 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Allowances, Emoluments, Income Sources, Personal income tax, Tax Clearance Certificate, Tax Liability
Level: Level 2

Topic: Personal Income Tax
Series: NOV 2015

TAX – Nov 2020 – L1 – SA – Q6 – Tax Administration and Enforcement

: State the contents of a tax return, conditions for TCC issuance, and transactions requiring TCC.

Question

Total: 20 Marks

Answer

Find Related Questions by Tags, levels, etc.

Tags: Nigerian Tax System, Required Transactions, Tax Clearance Certificate, Tax Return, TCC Conditions
Level: Level 1

Topic: Tax Administration and Enforcement
Series: NOV 2020

TAX – May 2019 – L2 – Q7b – Tax Administration and Enforcement

Identify the types of information disclosed in a tax clearance certificate.

Question

Identify four types of information that are expected to be disclosed in a tax clearance certificate.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Disclosure Requirements, Tax Clearance Certificate, Tax Compliance
Level: Level 2

Topic: Tax Administration and Enforcement
Series: MAY 2019

PT – March 2023 – L2 – Q5a – Tax Administration

State the transactions that require the use of a Tax Clearance Certificate (TCC).

Question

Required:

State SIX (6) transactions that require the use of a TCC.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Compliance, Tax Administration, Tax Clearance Certificate, TCC
Level: Level 2

Topic: Tax Administration
Series: MAR 2023

Question Tag: Tax Clearance Certificate

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TAX – Nov 2014 – L2 – Q6 – Tax Administration and Enforcement

Draft an objection letter addressing a Best of Judgment assessment and provide relevant tax liability calculations for Osondu Bako Company Ltd.

TAX – May 2017 – L2 – SB – Q2 – Tax Administration and Enforcement

Explanation of transactions requiring a Tax Clearance Certificate and the procedures for hearing an appeal before the Tax Appeal Tribunal.

TAX – Nov 2015 – L2 – Q3 – Personal Income Tax (PIT)

This question involves computing the personal income tax liability of an employee for two consecutive years.

TAX – Nov 2020 – L1 – SA – Q6 – Tax Administration and Enforcement

: State the contents of a tax return, conditions for TCC issuance, and transactions requiring TCC.

TAX – May 2019 – L2 – Q7b – Tax Administration and Enforcement

Identify the types of information disclosed in a tax clearance certificate.

PT – March 2023 – L2 – Q5a – Tax Administration

State the transactions that require the use of a Tax Clearance Certificate (TCC).

TAX – Nov 2014 – L2 – Q6 – Tax Administration and Enforcement

Draft an objection letter addressing a Best of Judgment assessment and provide relevant tax liability calculations for Osondu Bako Company Ltd.

TAX – May 2017 – L2 – SB – Q2 – Tax Administration and Enforcement

Explanation of transactions requiring a Tax Clearance Certificate and the procedures for hearing an appeal before the Tax Appeal Tribunal.

TAX – Nov 2015 – L2 – Q3 – Personal Income Tax (PIT)

This question involves computing the personal income tax liability of an employee for two consecutive years.

TAX – Nov 2020 – L1 – SA – Q6 – Tax Administration and Enforcement

: State the contents of a tax return, conditions for TCC issuance, and transactions requiring TCC.

TAX – May 2019 – L2 – Q7b – Tax Administration and Enforcement

Identify the types of information disclosed in a tax clearance certificate.

PT – March 2023 – L2 – Q5a – Tax Administration

State the transactions that require the use of a Tax Clearance Certificate (TCC).

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TAX – Nov 2014 – L2 – Q6 – Tax Administration and Enforcement

Draft an objection letter addressing a Best of Judgment assessment and provide relevant tax liability calculations for Osondu Bako Company Ltd.

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TAX – May 2017 – L2 – SB – Q2 – Tax Administration and Enforcement

Explanation of transactions requiring a Tax Clearance Certificate and the procedures for hearing an appeal before the Tax Appeal Tribunal.

You're reporting an error for "TAX – May 2017 – L2 – SB – Q2 – Tax Administration and Enforcement"

TAX – Nov 2015 – L2 – Q3 – Personal Income Tax (PIT)

This question involves computing the personal income tax liability of an employee for two consecutive years.

You're reporting an error for "TAX – Nov 2015 – L2 – Q3 – Personal Income Tax (PIT)"

TAX – Nov 2020 – L1 – SA – Q6 – Tax Administration and Enforcement

: State the contents of a tax return, conditions for TCC issuance, and transactions requiring TCC.

You're reporting an error for "TAX – Nov 2020 – L1 – SA – Q6 – Tax Administration and Enforcement"

TAX – May 2019 – L2 – Q7b – Tax Administration and Enforcement

Identify the types of information disclosed in a tax clearance certificate.

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PT – March 2023 – L2 – Q5a – Tax Administration

State the transactions that require the use of a Tax Clearance Certificate (TCC).

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TAX – Nov 2014 – L2 – Q6 – Tax Administration and Enforcement

Draft an objection letter addressing a Best of Judgment assessment and provide relevant tax liability calculations for Osondu Bako Company Ltd.

You're reporting an error for "TAX – Nov 2014 – L2 – Q6 – Tax Administration and Enforcement"

TAX – May 2017 – L2 – SB – Q2 – Tax Administration and Enforcement

Explanation of transactions requiring a Tax Clearance Certificate and the procedures for hearing an appeal before the Tax Appeal Tribunal.

You're reporting an error for "TAX – May 2017 – L2 – SB – Q2 – Tax Administration and Enforcement"

TAX – Nov 2015 – L2 – Q3 – Personal Income Tax (PIT)

This question involves computing the personal income tax liability of an employee for two consecutive years.

You're reporting an error for "TAX – Nov 2015 – L2 – Q3 – Personal Income Tax (PIT)"

TAX – Nov 2020 – L1 – SA – Q6 – Tax Administration and Enforcement

: State the contents of a tax return, conditions for TCC issuance, and transactions requiring TCC.

You're reporting an error for "TAX – Nov 2020 – L1 – SA – Q6 – Tax Administration and Enforcement"

TAX – May 2019 – L2 – Q7b – Tax Administration and Enforcement

Identify the types of information disclosed in a tax clearance certificate.

You're reporting an error for "TAX – May 2019 – L2 – Q7b – Tax Administration and Enforcement"

PT – March 2023 – L2 – Q5a – Tax Administration

State the transactions that require the use of a Tax Clearance Certificate (TCC).

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