Economy
SEC Urges FG to Exempt Corporate Bonds from Tax
By Aduragbemi Omiyale
The federal government has been urged to consider another tax holiday for corporate bonds in order to boost liquidity in the Nigerian capital market.
Recall that in 2012, the central government exempted bonds and short-term government securities from income tax for 10 years, which recently expired on January 1, 2022.
At the moment, only government securities are tax-free as investments in debt instruments issued by corporate organisations attract tax payments.
But the Securities and Exchange Commission (SEC) is asking the government to again exempt corporate bonds from tax payment to unlock the attractiveness of the corporate bond market.
Speaking over the weekend after the second Capital Market Committee (CMC) meeting for this year, the Director-General of SEC, Mr Lamido Yuguda, said this move would encourage more companies to approach the capital market for their funding needs.
“The Nigerian capital market community held its second Capital Market Committee (CMC) Meeting for the year on Thursday, August 18, 2022. The meeting was well attended by over 300 capital market operators and we had very robust deliberations.
“We observed that the world is facing high inflation and low growth. Consequently, the World Bank, the International Monetary Fund and other Economic forecasters are trimming down growth estimates with forecasts reflecting sizable downgrades to the outlook for the rest of the year and 2023.
“The commission continues its engagement with the Minister of Finance, Budget and National Planning on the request for tax exemption for corporate bonds,” he said.
He added, “For any asset class, the investment is a function of many considerations. Tax is just one of those considerations. Although it is only one, it is an important consideration especially when the tax rate is high.
“So, I think for now, given that there are so many considerations, and considering all these factors, we feel the tax rebate should be reinstated and we have been working with the tax and fiscal authorities to advocate the return to the status quo.”
The SEC DG also said that the revised Capital Market Masterplan would be launched by November following its approval by the federal government.
The Capital Market Master Plan Implementation Council had in June this year submitted the revised Nigerian Capital Market Master Plan (2021 -2025) to the Minister of Finance, Budget and National Planning.
Mr Yuguda assured that despite the harsh operating environment, the commission will continue to strive and fulfil its mandate of protecting investors and creating an enabling environment for market operations.
The SEC boss urged all stakeholders to continue to work towards reducing the volume of unclaimed dividends and reiterated that stiff penalties will be meted out to any stakeholder whose action appears to frustrate the efforts of the Commission on this objective.
He lamented that despite the commission’s efforts in the implementation of the Electronic Dividend Mandate Management System, investors have continued to lament the delayed payments of e-dividend and the cumbersome manual process among other shortcomings.
“A large number of investors are also still unaware of the eDMMS and have not mandated their accounts. The commission will, however, continue to create awareness in this regard.
“Capital market operators must also do more to demonstrate, through their activities, an efficient capital market that prioritizes the interests of investors,” he added.
As part of its efforts to stem the tide of fraudulent activities of unregistered investment crowdfunding platforms, the SEC DG at the briefing warned operators of such platforms that they stand the risk of being prosecuted.
He said, “The commission has an existing regulatory framework that permits private companies with the required structure and mechanism to raise capital from the public through crowdfunding. All crowdfunding platforms must register with the agency.
By Adedapo Adesanya
The Nigeria Customs Service (NCS) is seeking a reduction in import duty exemptions, which rose to N34 trillion, limiting its ability to increase its revenue generation threshold.
The Comptroller-General of the Customs Service, Mr Adewale Adeniyi, disclosed that the value of import duty exemption certificate approvals increased to that level in 2025, describing the policy as one of the major factors restricting its revenue generation.
At an investigative session of the Senate Committee on Finance with revenue-generating agencies in Abuja on Monday, Mr Adeniyi explained that government fiscal policies have continued to impact the revenue-generating capacity of the Customs Service, both positively and negatively.
“The NCS would have generated significantly higher revenue over the years if not for government-approved import duty waivers and other external factors affecting collections,” he said.
He added that the Import Duty Exemption Certificate scheme, introduced in March 2020, accounted for about N34 trillion in approvals in 2025, with nearly 60 per cent covering duty-free importation of military hardware due to Nigeria’s prevailing security challenges.
Other government-backed duty waivers, he noted, covered the importation of Compressed Natural Gas (CNG), electric and hybrid vehicles, healthcare equipment and medical supplies, industrial machinery and manufacturing inputs, as well as food import intervention programmes.
While acknowledging the impact of the waivers on Customs revenue, Mr Adeniyi argued that fiscal policy should not be assessed solely on the basis of revenue generation but also on its broader economic and social objectives.
He, however, urged the federal government to establish stronger monitoring mechanisms to ensure beneficiaries of duty waivers deliver the intended economic outcomes, including lower consumer prices, increased local production and improved healthcare access.
The committee also expressed displeasure over the absence of several heads of government agencies invited to the hearing, including the Nigerian Civil Aviation Authority (NCAA), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Industrial Training Fund (ITF), and the Federal Medical Centre (FMC), Jabi.
The Chairman of the Senate Committee on Finance, Mr Sani Musa, warned that the affected chief executives must appear at the committee’s next sitting or face severe sanctions under the Senate’s rules.
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By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rose by 0.40 per cent on Monday, July 13, buoyed by buying interest in 11 Plc, Central Securities Clearing System (CSCS) Plc and UBN Property Plc, which offset the profit-taking in Food Concepts Plc, the parent company of Chicken Republic.
11 Plc gained N20.69 to end at N227.64 per share compared with last Friday’s price of N206.95 per share, CSCS Plc grew by N1.83 to N91.48 per unit from N89.65 per unit, and UBN Property Plc added 1 Kobo to sell at N1.81 per share versus N1.80 per share.
On the flip side, Food Concepts Plc depreciated by 24 Kobo to close at N2.45 per unit, in contrast to the preceding session’s N2.69 per unit.
As a result, the market capitalisation increased by N9.2 billion to N2.587 trillion from N2.578 trillion, and the NASD Security Index (NSI) improved by 15.33 points to 4,311.67 points from 4,296.34 points.
Yesterday, the volume of securities traded by investors surged by 615.9 per cent to 9.1 million units from the previous 1.3 million units, and the value of securities rose by 997.1 per cent to N320.4 million from the preceding session’s N29.2 million, while the number of deals decreased by 12.5 per cent to 28 deals from last Friday’s 32 deals.
At the close of trades, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 73.9 million units exchanged for N5.2 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
