Some investors in the Nigerian capital market have called on the federal government to extend the exemption of value added tax (VAT) charges on transactions on the Nigerian Stock Exchange (NSE) so as to attract more patronage to the market.
The federal government, had in 2014 exempted brokerage commission and transactions fees charged by Securities and Exchange Commission(SEC), NSE and Central Securities Clearing System(CSCS) Plc from the five percent VAT.
NgoziOkonjo-Iweala, the then coordinating minister for the economy and minister of finance, had announced the exemption as part of efforts to resuscitate the market. The exemption was for five years.
Following the expiration of the exemption, the NSE has notified stockbrokers that effective Thursday July 25, 2019 (tomorrow) the five per cent VAT would now be charged.
In a notification to stockbrokers, signed by head, broker/dealer regulation, NSE, Olufemi Shobanjo, said that exemption, which became effective on 25 July 2014 and valid for a period of five years, has expired July 24, 2019.
“To that extent, all dealing members of the NSE are to note that effective 25 July 2019, barring any further extensions from the federal government: VAT is to be charged on all commissions applicable to capital market transactions.
These are commissions earned by dealing members on traded values of shares; and payable to the NSE and CSCS