Resolution on VAT exemption for capital market operators ready soon – Osinbajo

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, has stated.

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 at the weekend, stated that VAT exemption, stamp duties and other issues were being addressed currently, adding that a resolution would be announced very soon.

A statement by the SEC Head of 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 distribution, providing capital to small and medium scale enterprises as well as catalysing 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 masterplan, 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 this 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.

According to Osinbajo, “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 position our market to where it should be. This administration, and especially my office, has supported the 10-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 the 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 President Muhammadu Buhari administration, he noted, recognised critical sectors for financing to include agriculture, infrastructure, power and SMEs, but added that the government cannot do this alone.

According to him, the 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, the 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 Sukuk Bond, 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 support, and I look forward to working with you and other stakeholders in the financial system to actualise a vibrant economy of our dreams,” he added.

In his address, 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 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.

It would be recalled that VAT charges on transactions in the capital market was suspended in 2014 by then Minister of Finance, Dr. Ngozi Okonjo-Iweala, to encourage increased trading activities in the market and the suspende came to an end on July 24, 2019.