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FG set to implement waivers on VAT, stamp duties in Capital Market

By BusinessNews Staff on September 30, 2014

Strong indications have emerged that the federal government is set to implement tax waivers and incentives approved by President Goodluck Jonathan to boost capital market activities in 2012.

Jonathan had, through the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, announced forbearance for some stockbroking firms and abolished stamp duties and VAT payment on secondary market transactions as part of efforts to revive the Nigerian capital market.

However, while the forbearance for stockbrokers was implemented last year, the payment of stamp duties and VAT on secondary market transactions continues.

The Director General of the Securities and Exchange Commission (SEC), Ms. Arunma Oteh had last year explained that the delay was due to non-gazetting of the approval.

She had explained that the process involves the Ministry of Finance, Ministry of Justice and Federal Inland Revenue Service (FIRS), adding that the number of agencies involved was also an issue.

However, top capital market sources confirmed at the weekend that the federal government was ready with the gazette which will give legal backing to the waivers.

“The gazette is ready and with the next few weeks, it will formally be made public. This is a good development because we have waited for this for almost two years now,” a source said.

The new President of the Nigerian Stock Exchange (NSE), Mar. Agboje Aig-Imoukhuede, also gave a hint of this development when he said at a dinner in Lagos that very soon stamp duties and VAT would no longer be paid on transactions in the secondary segment of the capital market.
Market operators had called for quick implementation of the incentives to make the market for attractive.

“I strongly believe that speedy implementation of decisions by regulators and government would also help boost confidence of investors. For example, the quick implementation of the removal of stamp duties and VAT payment on secondary market transactions could attract stronger interest in the market,” Group Managing Director of BGL Group, Mar. Albert Okumagba had said.

Another market operator had also urged those involved in the implementation should put their acts together and ensure the order takes effect.
“While one must acknowledge the intricacies due to the number of agencies involved in the implementation, it is not encouraging to note that over one year after a decision was taken and approval given by the president, it is yet to be implemented. This, to me, sends wrong signals to the investing public and entire capital market community. I believe the government should keep to its promises,” he had said.

The operators stressed that implementation these incentives would boost efforts to reduce cost of transactions in the Nigerian capital market, which is believed to be holding back significant patronage from the market.

[This Day]

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