By Omobayo Azeez
The Nigerian Stock Exchange (NSE) is in talks with authorities of the federal government to be considered for a five year extension of value added tax (VAT) over transactions performed on the floor of the Exchange.
Oscar Onyema, chief executive of the Exchange, who disclosed this on the sideline of the 58th Annual General Meeting of the NSE held at the bourse’s office in Lagos on Monday, said the five year waiver initially granted the Exchange by the federal ministry of finance lapsed in July this year.
According to him, while in talks with authorities to get an extension of the VAT holiday on transactions performed on investment at the Exchange, the management of the bourse has reintroduced the tax.
He said: “As you know, about five years ago, the Exchange received a waiver from the ministry of finance on VAT payment with regards to payments that are done on the floor of the exchange; and this was applicable not only to the Exchange but the CSCS and brokers that execute transactions at the exchange.
“That five year waiver lapsed in July of this year. We started earlier on this year in January to engage with government and stakeholders to see if we can extend the waiver for another five year. Giving the softness in the economy and in the capital market, those conversations continue to go high.”
While stating that the NSE is optimistic of a positive response from the government on the matter, Onyema stressed that the VAT waiver programme helps investors, and also puts the Nigerian Stock market in a very competitive footing.
“This is because if you look at other markets that are competing for other floors with us across frontier and emerging markets, most of them have those waivers permanently in place.
“Just recently, Ghana announced their own programme where there will be no VAT on transactions. So we are looking forward to receiving the same type of consideration from the appropriate authorities,” he said.
Speaking on the demutualization of the exchange, Onyema noted that the management had achieved tremendously and remained fervently on course.
“With regards to demutualization, we have made significant progress. As you know, in 2018, we got presidential assent to demutualization Act which set in place the appropriate legal framework for us to execute demutualization. We have gone ahead to complete and submit documentation with the Security and Exchange Commission (SEC) for their No Objection.
“So, once we get their No Objection, we will come back and have meeting with membership to get their final vote. And if do get that final vote, we will then re-submit a formal application to the SEC to complete the mutualisation process and also to the Corporate Affairs Commission (CAC) to be registered as a demutualised Exchange,” he explained.
He added that the management of the exchange had been doing all within its power to bring more issuers on board for the sake growing the valuation and wealth creation, reminding that the market is a multi-asset exchange that is ready to accommodate issuers from various sectors.
While Onyema congratulated Nigeria at the occasion of its 59th Independence Anniversary, he charged the country work towards accelerating its growth rate.
He said, “We must congratulate this nation for attaining this milestone of 59 years. Our aspiration for the nation is that it continues to be one nation that grows significantly and achieve its potentials which we all are always talking about.
“We really need to achieve significant growth rate; and if possible, double digit growth rate. I think that is what will take us to our rightful position.”
Meanwhile, analysis of the annual report of the Exchange for the 2018 financial year shows that the Exchange recorded N7.6 billion in revenue with a profit after tax of N2.7 billion in the year.
Valuation of the market, as at December 30, 2018, stood at N21.9 trillion and the all share index (ASI) also stood at 45,092.83 bps.
The market also witnessed the first ever listing of FGN Sukuk bond of N100 billion and 11.75 per cent in fixed income capitalization from N9.10 trillion in 2017 to N10.17 trillion last year.