By Babajide Komolafe, Peter Egwuatu & Nkiruka Nnorom

… SEC to issue new capital base
The Securities and Exchange Commission (SEC), has said that the implementation blueprint for the removal of Value Added Tax (VAT) and removal of stamp duty on capital market transactions is being reviewed by the Attorney General of the Federation (AGF).

Director General of the SEC, Ms. Arunma Oteh, disclosed this at a maiden press briefing for 2013 in Lagos, saying that the implementation would commence as soon as the AGF concludes his work.

She said the Commission will soon announce new minimum capital base requirement for operators in the capital market, adding that the Board of the Commission has ordered it to expedite action on the implementation of dematerialisation of share records and documents.

Speaking on the focus of the Commission in 2013, Oteh said, “The commission will show its effectiveness in technology, enforcement and disclosure regime during the course of the year. The market will see stronger and speedy enforcement and disclosure requirements in our market. We are already preparing our staff ahead of these tasks.”

On the implementation of Stamp duty and VAT, she, said, “President Goodluck Jonathan has instructed the AGF to look into it and the process is being reviewed. Once it has completed the review process, the implementation will commence.”

It will be recalled that as part of measures to improve the confidence in Nigeria’s capital market last year, the federal government decided to eliminate stamp duties and VAT on stock market transaction fees. Dr Ngozi Okonjo Iweala , Minister of Finance and the Coordinating Minister for the economy, who revealed this, said, “Taxes on stock exchange transactions fees are as high as 12 percent (five percent in VAT and up to seven percent in stamp duties) – much higher than in other jurisdictions, and these constitute a major disincentive to invest in the Nigerian capital market.

“I will like to announce that the Federal Government has consented to: waive the 0.075 percent stamp duties payable on stock exchange transaction fees; and, exempt from VAT, commissions: (a) earned on traded values of shares, payable to the Securities and Exchange Commission (SEC), the Nigerian Stock Exchange (NSE) and the Central Securities Clearing System (CSCS); by including these commissions in the list of VAT-exempt goods and services.”

Commenting on the forbearance package recently granted to the stockbrokers, the SEC DG said, “59 of the stockbroking firms out of the 84 firms decided to accept it. Although there is no cash involved in the forbearance, but the bad assets totaling N22.9 billion was reduced to N10 billion.” She further stated that the SEC is committed to protect investors and would encourage them to patronize the Collective Investment Scheme (CIS).