FG May Suspend VAT Payment on NSE Transactions

By Dipo Olowookere

There are strong indications that the payment of Value Added Tax (VAT) on transactions conducted on the floor of the Nigerian Stock Exchange (NSE) may again be suspended for another period soon.

This is because federal government is looking into the requests made stakeholders in the nation’s capital market for an extension for the VAT exemption on NSE transactions.

Business Post reports that in 2014, the federal government, through the Minister of Finance, Mrs Ngozi Okonjo-Iweala, had announced a 5-year tax holiday for players in the stock market so as to encourage more participation. This VAT exemption ended July 24, 2019, with brokerage firms informing their clients that they would begin to pay the tax on commissions earned for executing any buy or sell transactions from July 25, 2019.

Speaking recently in Lagos at an awards ceremony organised by the Association of Issuing Houses of Nigeria (AIHN), the nation’s Vice President, Mr Yemi Osinbajo, promised to critically look into the matter and come up with what would excite the capital market community.

“We are looking into the requests made for an extension of VAT exemption on capital market transactions and would announce the resolution very soon,” Mr Osinbajo, who was represented at the event by the acting Director-General of the Securities and Exchange Commission (SEC), Ms Mary Uduk, said.

The Vice President described the capital market as a vital part of the economy, promising to work with the players to come up with robust policies that would friendly environment for investors.

“We see the capital market as an important driver of our growth agenda and we will continue to collaborate with the capital market community to support its efforts to positioning our market to where it should be.

“This administration, and especially my office, has supported the 10-year Capital Market Master Plan implementation initiatives since inception in 2015.

“The AIHN is an important player in the Nigerian capital market and I commend its members for directly contributing to the economy by aggregating the much-needed funding to support entities in the private and public sectors,” he said.

The Vice President disclosed that, “We have commenced work on other aspects of the Capital Market Master Plan Implementation Council (CAMMIC)’s requests that require government intervention.

“We will be collaborating with many of you in the capital market community to successfully address them. My office is actually represented on the CAMMIC. I will, therefore, be receiving periodic reports on suggestions to further strengthen our support of your efforts and the market as a whole,” he said.

Mr Osinbajo further stated that, “We all desire a capital market that will broaden access to economic prosperity by enabling the emergence of financially responsible citizens, accelerating wealth creation and wealth distribution, providing capital to small and medium scale enterprises, and catalysing housing finance.”