The re-introduction of Value Added Tax charges on transactions in the Nigerian capital market takes effect from today, July 25, 2019.
The VAT charges on transactions in the capital market were suspended in 2014 by the then Minister of Finance, Dr Ngozi Okonjo-Iweala, to encourage increased trading activities in the market.
Okonjo-Iweala had set up a committee to revive activities on the Nigerian Stock Exchange, following the financial crisis and extended periods of negative market sentiments recorded on the bourse in previous years.
The committee reached a decision to waive the 0.075 per cent stamp duties payable on stock exchange transaction fees and exempt from VAT commissions earned on traded values of shares, commissions payable to the Securities and Exchange Commission and commissions payable to the Nigerian Stock Exchange, the Central Securities Clearing System and the NASD OTC Securities Exchange.
While stakeholders in the capital market have called for an extension of the waiver period, the NSE and the NASD are set to resume deduction of VAT on commissions applicable to capital market transactions referred, while awaiting further directives emanating from ongoing engagements with the Federal Government on the issue.
The NASD said, “We shall notify the market of any new developments, but in the absence of none, kindly take this as a notice to resume deduction of VAT on commissions applicable as this will ensure a smoother and more transparent OTC market.”