Tuesday, 28 October 2014

FG Gazettes Removal of VAT on Market Transactions.

Dr. Ngozi Okonjo-Iweala
The abolition of five per cent Value Added Tax (VAT) paid by investors on shares traded in the Nigerian capital market by the federal government has become effective. This follows the gazetting of the issue by the government.
Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, announced the abolition of VAT and stamp waiver on December 3, 2012, as part of measures to resuscitate the Nigerian capital market.
Almost two years after, the waivers were not implemented due to their non-gazetting. THISDAY recently reported that the federal government was  working on how to gazette them for their implementation to begin.
The Nigerian Stock Exchange (NSE) yesterday confirmed the gazetting of the abolition of VAT on all commissions application to capital market transactions. These commissions include those:   earned on traded values of shares; payable to the Securities and Exchange Commission (SEC), the NSE and the Central Securities Clearing System (CSCS). According to the gazette, the exemption is effective for a period of five years.
Chief Executive Officer, Mr.  Oscar Onyema has hailed the government for gazetting the vat removal, stating that it was a demonstration that the capital market is a key component of the federal government’s transformation agenda.
According to Onyema, investments should not be categorised as consumer goods purchases, but as a platform to promote a long term savings culture that could be channelled towards economic growth and development.
“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 added.
He however noted that the stamp duty waiver, which was also announced in 2012 by the minister, is yet to be implemented.
Onyema expressed the hope that the federal government will expedite the implementation process in the interest of investors in the Nigerian capital market, which is an important engine of growth for the Nigerian economy.

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