Stock Investors Prepare for Implementation of 0.08% Stamp Duty on Trades
By Dipo Olowookere
Investors in the Nigerian stock market are gearing up for the implementation of the increase in the stamp duty from Monday, December 8, 2020.
Business Post had reported last month that from next week, any buy and sell order on the Nigerian Stock Exchange (NSE) will attract a stamp duty of 0.08 per cent.
At the moment, 0.075 per cent is charged for the sale or purchase of securities on the exchange, including equities, exchange-traded fund (ETF), amongst others.
The Central Securities Clearing System Plc (CSCS) is already taking steps to adjust its system to implement the automated deduction of the stamp duty rate of 0.08 per cent from next Monday.
The NSE, in a statement on Thursday, said stockbrokers have also been issued the requisite guidance to put in place the necessary measures to ensure compliance and communicate this change to investors in a timely manner.
The exchange explained that this new development was necessitated by the classification of contract notes as an ad valorem tax by the Federal Inland Revenue Service (FIRS).
“As a responsive self-regulatory organisation, the exchange is committed to enforcing rules and ensuring compliance with regulations and other applicable government requirements.
“While it had maintained a stamp duty rate of 0.075 per cent in line with what was obtainable in the Nigerian capital market, it is imperative that the FIRS’ stamp duty regime of 0.08 per cent on securities transactions is applied,” it emphasised.
“Capital market stakeholders requiring further information can refer to the market circular issued by the exchange on November 17, 2020, captioned Administration of Stamp Duty on Securities Transactions, which can be accessed on the exchange’s website at http://www.nse.com.ng.
“Investors are also advised to contact their respective stockbrokers for more information or clarification,” the statement further said.