Shareholders under the aegis of Consolidated Shareholders Association of Nigeria (COSAN), have called on the Federal Government to stop charging10 per cent withholding tax on dividends as a way of boosting patronage of the market.
Chairman of COSAN, Mr. Raymond Anyiwo, made the call on behalf of members at an interactive session with members of the business community in Onitsha organised by the Securities and Exchange Commission (SEC) as part of capital market outreach in Anambra State.
According to him, considering the fact that investors had lost so much money since the downturn in the capital market in 2008 and were now depending mostly on dividends as returns, government should consider removing the 10 per cent withholding tax or reduce it to five per cent.
“Investors in this part of the country(eastern part) lost so much money in the capital market downturn because most of them entered the market when prices of equities were high. Convincing them to return to the market is now a tough task. However, we believe that some incentives would help to attract patronage back to the market. And one of such incentives is the removal of withholding tax. It is a burden because the companies pay other form of taxes, which affect the profit of companies and after paying that our dividends, which is given to us from profit is also taxed. If government want to encourage patronage, the issue of withholding tax should be addressed,” Anyiwo said.
The shareholder activist, however, commended SEC for embarking on the outreach, saying it was able to address some of the questions that had been agitating the minds of many investors who lost money in the market.
“We are happy to see the team from SEC, led by the Director-General, Ms. Arunma Oteh, in Onitsha. Many investors have been asking questions without getting the required answers. But the outreach has addressed most of the questions and opened a communication channel between the apex regulator and investors. We commend this development and urge the commission not to relent in efforts to strengthen regulation in the market,” he said.
In her response, Oteh noted that the Nigerian capital market had overcome the challenges that prevailed in the past and led to loss of shareholding / value for many an investor.
“We are implementing a reform effort in the capital market which is aimed at improving investor protection through, among others, eliminating sharp practices among operators, improving enforcement of rules and regulations, ensuring a more transparent and credible market characterised by a wider scope of information disclosure and transparency, infusing market processes with Information Communications Technology (ICT) for greater efficiency, improving complaints management through a more efficient and integrated framework among others,” she said