VAT on Capital Market Transactions Waived by FG

The payment of Value Added Tax on all capital market transactions have been waived by the Federal Government. This information was disclosed by the Nigerian Stock Exchange, on Monday, July 27.

The Minister of Finance had announced two years ago on December 3, 2012, that the VAT exemption would be extended to capital market transactions in order to encourage participation in the market.

In a statement made on Monday, the Exchange said it was “pleased to learn that the VAT exemption is now effective on all commissions applicable to capital market transactions.

“These are commissions: (a) earned on traded values of shares, and (b) payable to the Securities and Exchange Commission, the Nigerian Stock Exchange and the Central Securities Clearing System.

“The exemption is effective for a period of five years, according to the Federal Government gazette on the issue.”

The Chief Executive Officer of the NSE, Mr. Oscar Onyema, was thankful to the Federal Government for implementing the elimination of VAT on stock market transaction fees.

He expressed that the decision is an indication that the capital market is a key component of the Federal Government’s transformation agenda.

Onyema explained that investments should not be categorized as consumer goods purchases, but as a platform to promote a long-term savings culture that could be channeled towards economic growth and development.

He said, “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.”
According to Onyema, the stamp duty waiver, which was announced along with the VAT exemption had yet to be implemented, though he made it known that it would be implemented soon to further encourage the growth of the market.