The Federal Government (FG) has stated that it is already tackling the issues regarding the extension of the Value Added Taxation (VAT) exemption on capital market transactions.
This was stated by vice president Yemi Osinbajo at the awards night of the Association of Issuing Houses of Nigeria, AIHN, held in Lagos weekend.
VAT charges on transactions in the capital market had been suspended in 2014 by Ngozi Okonjo-Iweala, the minister of finance then, to encourage increased trading activities in the market. That waiver, however, ended on July 24, 2019.
Osinbajo who was represented by Mary Uduk, the acting director general of the Securities and Exchange Commission (SEC), said, the VAT exemption, stamp duties collection and other issues are being addressed currently and a resolution would be announced very soon.
“We have also commenced work on other aspects of CAMMIC’S requests that require government intervention and would be collaborating with many of you in the capital market community to successfully address them. My Office is actually represented on the CAMMIC. I will therefore be receiving periodic reports on suggestions to further strengthen our support of your efforts and the market as a whole, Osinbajo said.
According to him, we all desire a capital market that would broaden access to economic prosperity by enabling the emergence of financially responsible citizens, accelerating wealth creation and wealth distribution, providing capital to small and medium scale enterprises, and catalyzing housing finance.
To this end, he commended the Securities and Exchange Commission, CAMMIC and the capital market community for the laudable accomplishments so far recorded in the implementation of the master plan, especially in the areas of dematerialization of share certificates, e-dividend mandate, facilitation of access to alternative investments as well as various initiatives to enhance the commodities eco-system.
The vice president described the capital market as essential and key to achieving the economic goals of this administration as enshrined in the Economic Recovery and Growth Plan (ERGP), hence the administration has worked hard to ensure a stable macroeconomic environment, which is necessary to attract and sustain investment that we need to propel our economy forward.
He said, “We see the capital market as an important driver of our growth agenda and we will continue to collaborate with the capital market community to support its efforts to positioning our market to where it should be. This Administration and especially my Office has supported the 10-year Capital Market Master Plan implementation initiatives since inception in 2015”.
He described AIHN as an important player in the Nigerian capital market and commended its members for directly contributing to the economy by aggregating the much-needed funding to support entities in the private and public sectors, adding that government and the private sector need to continue to work together to create sustainable businesses and provide the necessary jobs for the teeming youths.
Osinbajo said the Economic Recovery and Growth Plan (ERGP) of the Buhari administration recognizes critical sectors for financing to include agriculture, infrastructure, power and SMEs, but added that the government cannot do this alone.
Government he said, must evolve from an omnibus provider of citizens’ needs into a force for eliminating the blockages that restrict innovation and market-based solutions.
“In this regard, government has collaborated with the capital market community and particularly with members of your association in structuring novel arrangements to fund infrastructure development through instruments such as the FGN Sukuk Bond, FGN Green Bond, Infrastructure Funds as well as the planned trading of tax credit instruments.
“Therefore, as you chart the course of the capital market for the next four years, I assure you of this administration’s support and I look forward to working with you and other stakeholders in the financial system to actualize a vibrant economy of our dreams” he added.
In his address, Chuka Eseka, president of AIHN, expressed the need for the private sector and the capital market to play driving roles in achieving economic prosperity and development while partnering with the government at all levels.
He emphasised the need for market operator role in the financial system value chain to be strengthened to enable the capital market deliver on its role as a catalyst of economic growth.