Ibekimi Oriamaja Reports
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.
According to the commission, tax exemption would increase market liquidity by increasing the appeal of the corporate bond market.
Lamido Yuguda, the director general of the SEC, made this statement during a press conference to discuss the outcomes of the second Capital Market Committee meeting of the year.
Bonds and short-term government securities were excluded from income tax for ten years beginning on January 1, 2022, thanks to a 2012 federal law.
The second Capital Market Committee (CMC) meeting for the year was convened by the Nigerian capital market community on Thursday, August 18, 2022, according to a statement from the SEC’s Head of Corporate Communications, Efe Ebelo. Over 300 capital market professionals attended the meeting, and we had a really lively discussion.
“We noticed that there is high inflation and little growth around the world. As a result, the World Bank, the International Monetary Fund (IMF), and other economic analysts are lowering their growth projections, with the outlook for the remainder of the year and 2023 indicating significant downgrades.
In regards to the request for a tax exemption for corporate bonds, the commission keeps in contact with the minister of finance, budget, and national planning.
He continued, “The investment is a result of several aspects for each asset type. One of such factors is tax. Despite their being only one, it is a crucial one, 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.
In addition, the SEC DG stated that the updated Capital Market Master Plan would be introduced in November pending Federal Government clearance.
