Claim: A viral WhatsApp message being shared on church platforms claims that churches are requested to get a Tax Identification Number (TIN) and the Special Control Unit on Money Laundering (SCUML).
While it is true churches need TIN and SCUML certificates, this does not translate to tax payment unless they engage in taxable activities.
A viral WhatsApp message being shared on church platforms claims that churches are requested to get a Tax Identification Number (TIN) and the Special Control Unit on Money Laundering (SCUML). It was further stated that the certification is part of a plan to get churches to pay tax in the future.
The message urged churches not to fill them as filling them gives no escape under the Universal Principle of Volenti Non-Fit Injuria.
“I hope we also know that the Federal Government of Nigeria requires that the church must get a Tax Identification Number trying to get SCUML CERTIFICATE that must be attached to your church accounts. The certificate is an anti-money laundering certificate. If you don’t have it, you’ll not be allowed to open a church account and also your existing account can be blocked anytime by EFCC.”
Excerpt of the bit.WhatsApp message.
Dubawa conducted a keyword search on SCUML certificate and TIN and studied different documents on them.
Dubawa visited the Federal Inland Revenue Service (FIRS) website but was unable to access documents found on the site.
Dubawa also visited the service Twitter’s page FIRS Nigeria (@firsNigeria) and got its help desk contact which we reached out to.
Dubawa also emailed the FIRS help desk and got a reply weeks later providing little information. For further clarification, Dubawa visited the service office in Abuja
What is TIN?
TIN is Taxpayer Identification Number (TIN). It is a unique number allocated and issued to identify a person (individual or Company) as a duly registered taxpayer in Nigeria and is to be used by that taxpayer alone.
How to get TIN
Registration for tax purposes is a legal obligation of every person who is required to pay tax in Nigeria. After registering and commencing your business, you get to understand taxation and how it works in Nigeria.
Taxation in Nigeria helps in the generation and redistribution of revenue to provide public services and improve the economy. There are laws that govern and regulate taxation in the different sectors of the economy in the country. One of these laws is the Company Income Tax Act (CITA), which is the principal law that governs the taxation of companies in Nigeria.
CIT is a tax imposed on the profit of a company from all its sources and it is also imposed on foreign companies operating a business in Nigeria. Section 1 of the Act provides for the establishment and constitution of the Board whose operational arm shall be called the Federal Inland Revenue Service, while Section 3 provides that the powers and duties of the board concerning companies include the collection of tax and accounting for all amounts collected.
How to get a TIN
The first step to get your TIN is for you to visit the Tax office and apply for Tax Identification Number (TIN) and VAT registration. At the Tax Office, you will obtain the VAT Registration Form (001) and the Taxpayer Registration Input Form.
You are also expected to apply for Income Tax registration and another one for VAT Registration using your company’s letter headed paper. The application for Income Tax Registration will provide the following information; name of company, registered office, business address, precise nature of business, date of incorporation, date the Company commenced business, accounting date, name and address of banker(s), particulars of major shareholders, particulars of directors, name and address of auditors, and the name and address of Tax representative.
What is a SCUML Certificate?
SCUML is the Special Control Unit Against Money Laundering (SCUML) certificate. SCUML is charged with the responsibility of monitoring, supervising and regulating the activities of Designated Non-Financial Institutions (DNFIs) in line with the Money Laundering (Prohibition) Act ML(P)Act 2011 and the Prevention of Terrorism Act (PTA) 2011.
This certificate is issued by the Economic Financial Crimes Commission (EFCC).
What are Designated Non-Financial Institutions (DNFIs)
Section 25 of the Money Laundering Prevention (MLP) Act defines DNFIs as dealers in Jewellery, Cars and Luxury Goods, Precious Stones and Metals, Real Estate, Estate Developers, Estate Surveyors and Valuers, Estate Agents, Chartered Accountants, Audit Firms, Tax Consultants, Clearing and Settlement Companies, Hotels, Casinos, Supermarkets, Dealers in Mechanized Farming Equipment and Machineries, Practitioners of Mechanized Farming, Non-Governmental Organizations (NGOs) or such other businesses as the Federal Ministry of Trade and Investment or appropriate regulatory authorities may from time to time designate.
Requirements for SCUML Registration.
For SCUML registration, the following are required; certificate of Incorporation, article and memorandum of association, Tax clearance certificate (this is not applicable to NGOs), audited financial report, authorised operational license (this is not applicable to NGOs), company/organization profile, constitution (for NGOs Only) vii. Agreement Signed between the NGO and the National Planning Commission ( For International NGOs Only).
To register for SCUML, the online form can be accessed here.
Business/organisations regulated by SCUML
Dealers in Jewelleries, Dealers in Luxury Goods, Chartered/Professional Accountants, Audit Firms, Tax Consultants, Clearing and Settlement Companies, Legal Practitioners, Trust and Company Service Providers. Estate Surveyors and Valuers, Hotels and Hospitality industry, Dealers and Miners of Precious Stones and Metals, Pool Betting, Casino and Lottery, Supermarkets, Non-Governmental Organizations, Consultants and Consulting companies, Construction Companies, Estate Agents, Dealers in Real Estate, Importers and Dealers in cars and vehicles Dealers in Mechanized farming equipment and machinery. Practitioners of mechanized farming and any other business(es) as may be designated from time to time by the Federal Ministry of Trade and Investment or SCUML
This is in accordance with the powers conferred on the Minister in charge of commerce to make further designations of DNFIs subject to section 25 of the ML (P) Act 2011. Such designation is usually made where a sector is found to be vulnerable to money laundering.
Claim 1: Churches are required to get TIN along with the SCUML certificate
This claim is true as the corporate affairs commission (CAC) views churches as an entity that needs to be registered even though the church is not a commercial entity. A step-by- step procedure on how to do this can be found here.
Also documents on the SCUML certificate also listed NGOs which the church falls under as businesses or organisations that require the SCUML certificate.
For TIN, the Help desk of FIRS also confirmed this by noting that any organisation registered with CAC is required to register and obtain a TIN.
“Any organization registered with the Corporate Affairs Commission (CAC) is required to register and obtain TIN. All NGOs/Non-profit Organizations are exempted from paying tax on their primary roles, unless they engaged in a taxable business. Churches need TIN to do some tax collection activities for the government like VAT and annual return reports.”
Excerpt of FIRS response.
Claim 2: Churches are given business forms to fill to get a TIN because TIN cannot be obtained under the Non-profit Organisation
This is false as TIN can be obtained under Non-profit or Non-governmental organisations. A document by FIRS on Tax Obligation of NGOs clearly states the procedures to register and get a TIN as soon as they register with CAC.
“NGOs operating in the country are required to register and obtain taxpayer Identification Number (TIN) free of charge from the Medium Tax Office (MTO), Abuja or the nearest Tax Office to their registered address as soon as they are registered by the Corporate Affairs Commission (CAC).”
Excerpt of FIRS document on Tax Obligation of NGOs.
Claim 3: This move to get TIN is to have strong legal grounds to tax churches in the future
This is false as the FIRS has said churches are not meant to pay tax and there is no plan to tax churches except those who engage in profit making activities.
“All NGOs/Non-profit Organizations are exempted from paying tax on their primary roles, unless they engaged in a taxable business.
Churches are not meant to pay tax unless they deviate from their usual religious activities and carry out profit making activities. Ideally as soon as they register and get TIN as an NGO, they are given an exception certificate from paying tax.”
Excerpt of FIRS comment.
Claim 4: Most big churches have gotten their TIN and SCUML certificate but no mosque has.
There is no proof of this as the FIRS clearly noted that the same obligation applies for churches and mosques as long as they are registered with CAC.
“Anybody who is incorporated must have a TIN for tracking purposes. Same thing applies to mosques that are incorporated.”
Excerpt of FIRS’ comment.
Claim 5: Part C of the Companies and Allied Matters Act expressly prohibits such.
Part C of the Companies Allied Matters Act which covers incorporated trustees (IT) does not prohibit getting a TIN but requires IT to get TIN even though they are not to pay taxes unless they indulge in profit making activities.
Dubawa also reached out to legal practitioners but got comments from only two.
A lawyer, John Achile, said there is the need for the SCUML certificate because of the issue of money laundering but churches are not taxable.
“Incorporated trustees are for Non-profit organisations and they are not taxable. They can get SCUML to show their account is not used for money laundering.”
Excerpt of John Achile’s comment.
Another lawyer, Elizabeth Achimugu, explained that incorporated trustees like churches and mosques are not to pay tax unless they indulge in profit making activities.
“We have the Incorporated Trustees (IT). This used to be under part C of CAMA but now I think it’s part F; the new CAMA just came out in january. It means that it is the trustees that are incorporated like churches, mosques, NGOs and anything that does not make profit. The trustees are the ones incorporated, they are the mind of the organisation. It is assumed they don’t do business so they shouldn’t make profit and their income is from grants, donations and registration of members. So if they fall into that category, they don’t pay taxes because you cannot pay taxes from gifts and donations but if for example you are a church and you decide to open a school and you make profit from the school, the school aspect of it needs to be registered because if it makes profit from the school, then it should pay taxes from the profit. But if you say the school is for charity, then you do not pay tax.”
Excerpt of Elizabeth’s comment.
She also added that the author of this message does not understand the context of the issue.
“A church is deemed a non-profit organisation and offerings are meant to be used for the development of the church and not as a business. So that is why in Nigeria, churches and religious organisationsdont pay tax byt if they have an affiliate institution that makes profit, those ones have to pay taxes. What the source of this message is saying is because he/she does not understand the context.”
Excerpt of Elizabeth’s comment.
The claims contained in the viral WhatsApp message are mostly false. While it is true churches need TIN and SCUML certificates, this does not translate to tax payment unless they engage in taxable activities.