Osinbajo:  Resolution on VAT Exemption for Capital Market Operators, Stamp Duties Ready Soon

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Yemi Osinbajo

Ndubuisi Francis in Abuja

The federal government  will soon come up with a resolution on issues bordering on the collection of stamp duties as well as the extension of Value Added Tax (VAT) exemption on capital market transactions, among others, the Vice-President, Prof. Yemi Osinbajo disclosed weekend.

VAT charges on transactions in the capital market, which was suspended in 2014 by then Minister of Finance, Dr. Ngozi Okonjo-Iweala to encourage increased trading activities in the market, ended on July 24, 2019.

Osinbajo, who was represented by the acting Director General of the Securities and Exchange Commission (SEC), Ms. Mary Uduk, at the awards night of the Association of Issuing Houses of Nigeria  (AIHN) in Lagos, stated that VAT exemption, stamp duties and other issues were being addressed currently, adding that a resolution would be announced very soon.

A press statement issued by the SEC Head, Public Communications, Efe Ebelo quoted Osinbajo as saying: “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.

“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.

“Let me therefore commend 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 dematerialisation 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 the present administration as enshrined in the Economic Recovery and Growth Plan (ERGP), noting that the administration has worked hard to ensure a stable macroeconomic environment, which is necessary to attract and sustain investment needed to propel the economy forward.

He added: “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 ten-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.

The ERGP of the Buhari administration, he noted, recognises critical sectors for financing to include agriculture, infrastructure, power and SMEs, but added that the government cannot do this alone.

According to him, government 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, the President of AIHN, Mr. Chuka Eseka, 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.