In News by Naijatweet Staff on the 11th, August, 2019

Nigerian govt considering VAT exemption extension – VP

Nigerian govt considering VAT exemption extension - VP


The Federal Government is considering an extension of the value added tax (VAT) exemption on capital market transactions, Vice President, Yemi Osinbajo, has said.

Also, the VP said the government is already taking steps to resolve the controversy over the collection of stamp duties.

The VP spoke at the Awards Night of the Association of Issuing Houses of Nigeria (AIHN) in Lagos on Saturday.

He was represented by the Acting Director General of the Securities and Exchange Commission (SEC), Mary Uduk.

In 2014, then Minister of Finance, Ngozi Okonjo-Iweala, suspended VAT charges on transactions in the capital market to encourage increased trading activities in the market.

That waiver period ended on July 24 this year.

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The VP said the government will soon announce the decision on how the issue, along with others, like the controversy over collection of stamp duties, have been resolved.

Backstory

The Nigerian Postal Service (NIPOST) is of the view it should collect and keep stamp duties on electronic banking.

This appears to contravene the constitutional requirement that all revenue collections by government ministries, departments and agencies should be transferred to the Federation Account.

The NIPOST argues it should use monies realised from stamp duties collections to run its operations.

The Chairman of the Federal Inland Revenue Service (FIRS), Tunde Fowler, told PREMIUM TIMES recently the law confers on the revenue service the mandate to collect the money on behalf of the Federation Account.

“The issue is now in court between the consultant (for NIPOST) and the government. So, pending the resolution of the controversy, the money is being warehoused in the CBN,” Mr Fowler said.

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“The position of government is that any money collected as stamp duty should be deposited in the federation account to be shared among the three tiers of government.

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“Government is working on a new bill to take care of this stamp duties. But, under the existing laws, it is the mandate of the FIRS to collect that money on behalf of the Federation Account,” he added.

Other efforts to strengthen capital market

According to the VP, work has commenced on other aspects of Capital Market Master Plan Implementation Council (CAMMIC) requests requiring government intervention.

He said government would collaborate with the capital market community to address the issues affecting it’s growth.

“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 g finance,” the VP said.

He described the capital market as key to achieving the economic goals of the present administration as contained in the Economic Recovery and Growth Plan (ERGP).

According to the VP, government has worked hard to ensure a stable macroeconomic environment, to attract and sustain investment needed to move the economy forward.

The ERGP recognizes critical sectors for financing to include agriculture, infrastructure, power as well as small and medium enterprises (SMEs).

President of AIHN, Chuka Eseka, urged the private sector and the capital market to play driving roles in achieving economic prosperity and development by partnering with the government at all levels.

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