By Hamisu B. S
All stock market transactions may attract VAT charges effective July 25, 2019, following the expiration of the five-year exemption.
The Federal Government of Nigeria granted exemption of VAT from all NSE transactions in 2014 (effective July 25, 2014) for five years. The policy was part of Government efforts to encourage investment in the Nigeria capital market
Dealing members of the Nigerian Stock Exchange have been notified to resume charging of 5% Value Added Tax (VAT) on all NSE transactions in the absence of a further extension, effective July 25, 2019.
The VAT will be charged on commissions earned on the traded value of shares payable to Securities and Exchange Commission (SEC); payable to the Nigerian Stock Exchange (NSE); payable to the Central Securities Clearing System (CSCS); and payable to the stockbrokers.
This will increase the cost of transactions in the market that will be born by investors. Commenting some analysts believe this will discourage potential investors from investing in the market and further depress the market that has been on negative return year to date.