FG considering VAT exemption extension — VP, Osinbajo – TheNigerialawyer

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.

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.

“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.

“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.