FG retracts statement on self-certification directives after public condemnation— 2mins read
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THE Nigerian Government has retracted and apologised over its earlier statement that asked every person that owns an account with any financial institutions to undergo a self-certification process.
The Nigerian Government in the now-deleted tweets had in a statement shared on its official Twitter account on Thursday announced the introduction of new directives stating that account-holders are required to obtain, complete and submit the self-certification forms to their respective financial institutions.
The decision which immediately generated controversy was met with criticism online and some Nigerians online accusing the government of engaging in poor communication techniques.
Many of those who reacted also questioned the directives, arguing that the Bank Verification Number (BVN) and the National Identification Number (NIN) are enough to provide needed data for the government.
Others also questioned the timing and government insistence on self-certification due to the Coronavirus Disease (COVID-19) pandemic.
The government had said individuals holding accounts in different financial institutions are required to complete and submit the form to each one of the institutions.
It also said the self-certification form is in 3 categories; “Form for Entity”, “For Controlling Person (Individuals having controlling interest in a legal person, trustee, etc)” and “Form for an individual”.
The tweets read, “This is to notify the general public that all account holders in Financial Institutions (Banks, Insurance Companies, etc) are required to obtain, complete and submit Self – Certification Forms to their respective Financial Institutions.”
“Persons holding accounts in different financial institutions are required to complete & submit the form to each one of the institutions. The forms are required by the relevant financial institutions to carry out due diligence procedures in line with the Income Tax Regulations 2019.”
The self-certification form is in 3 categories: – Form for Entity – For Controlling Person (Individuals having a controlling interest in a legal person, trustee, etc) – Form for the individual.”
It further said failure to comply with the requirement to administer or execute the form will attract sanctions which may include monetary penalty or inability to operate the account.
The FG in its clarification said the notice does not apply to everybody.
The tweet read, “We apologize for the misleading tweets (now deleted) that went up yesterday, regarding the completion of self-certification forms by Reportable Persons. The message contained in the@firsNigeria Notice does not apply to everybody. FIRS will issue appropriate clarification shortly.”
Also, the FIRS in a statement after the FG retraction said the ultimate objective of the Automatic Exchange of Information is to improve transparency in Nigeria’s tax system and boost the anti-corruption drive of the Government.
Stating that the exercise is required for due diligence in line with requirements of Income Tax (Common Reporting Standards) Regulations 2019.
It also said the Self-Certification Forms are to be administered by Financial Institutions to enable account holders to clearly document their respective jurisdictions of tax residence. Relevant Financial Institutions and other stakeholders have been adequately sensitised on this process.
Meanwhile, the FIRS had earlier in order to clarify the government directives, the Federal Inland Revenue Service (FIRS) in a statement posted on Twitter said the reportable persons are often non-residents and other persons who have residence for tax purposes in more than one jurisdiction or country.
It said, “This is to clarify 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.”
“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 the 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 the account opening processes for the KYC and AML purpose.”