The Federal Government has been requested by the Securities and Exchange Commission (SEC) to take into account its proposal to exempt corporate bonds from paying taxes.
This was said over the weekend during a media discussion about the results of the second capital market committee meeting of the year 2022, according to SEC Director-General Lamido Yuguda.
Bonds and short-term government securities were exempted from income tax for ten years by the federal government in 2012. This exemption recently came to an end on January 1, 2022.
Speaking about the tax on corporate bonds, the SEC DG claimed that the choice to seek a tax exemption would serve to increase the market’s allure.
We noticed that there is high inflation and little growth around the world, he remarked. As a result, the World Bank, the International Monetary Fund, and other economic forecasters are revising their growth projections downward, with their projections for the remainder of the year and 2023 exhibiting significant downward revisions.
“The Commission continues to discuss the tax exemption request for corporate bonds with the Minister of Finance, Budget, and National Planning.
“The investment is a result of several factors for any asset type. Even though it is only one of these factors, tax is a crucial factor, particularly when the tax rate is high.
We believe the tax rebate should be reinstated, and we have been working with the tax and fiscal authorities to lobby for the return to the status quo, in light of the fact that there are so many aspects to take into account.
The updated Capital Market Masterplan would be introduced by November, the SEC DG added, following federal government clearance.
The revised Nigerian Capital Market Master Plan (2021–2025) was sent to the Minister of Finance, Budget, and National Planning by the Capital Market Master Plan Implementation Council in June of this year.
Yuguda reassured that the Commission will continue to work hard and carry out its mandate to safeguard investors and foster a supportive environment for market activity despite the challenging operating climate.
The SEC Boss urged all stakeholders to keep working to reduce the amount of unclaimed dividends and reaffirmed that harsh penalties will be imposed on any stakeholder whose actions appeared to thwart the Commission’s efforts to achieve this goal.
Despite the commission’s efforts to deploy the Electronic Dividend Mandate Management System, he said, investors have continued to complain about a number of issues, including the slow e-dividend payments and the onerous manual process.
