The Federal Government on Monday removed Value Added Tax (VAT) on commissions applicable to capital market transactions. The government had, two years ago, announced that it would remove the VAT. Mr Oscar Onyema, the Chief Executive Officer of the Nigerian Stock Exchange (NSE), made this known in a statement issued in Lagos.
Onyema said that the NSE was delighted to know that the VAT exemption had been effected on all commissions applicable to capital market transactions.
He said that such commissions were earned on traded values of shares payable to the Securities and Exchange Commission, NSE and the Central Securities Clearing System.
Onyema quoted a Federal Government gazette as saying that the exemption would be for five years.
He commended the Federal Government for the gesture. The NSE boss said that investments should not be categorised as consumer goods but as a platform to promote a long-term savings culture channelled toward economic growth.
“The elimination of VAT on stock market transaction fees will ultimately reduce the cost of transactions for investors, and will encourage investments in the Nigerian capital market,” he said. Onyema, however, noted that the stamp duty waiver also announced in 2012, had yet to be implemented. He urged the government to expedite the implementation process in the interest of investors in the market.
Onyema said that the capital market was important engine of growth for the Nigerian economy and the realisation of the Federal Government’s transformation agenda.
The government had in December, 2012, announced the elimination of stamp duties and VAT on stock market transaction fees.The elimination, according to the Minister of Finance, Dr Ngozi Okonjo-Iweala, was part of government efforts to resuscitate the Nigerian capital market.
Okonjo-Iweala said that taxes on stock exchange transactions fees were as high as 12 per cent in VAT and about seven per cent in stamp duties. She said that they constituted major disincentives to investment in the Nigerian capital market.
