Stories by Peter Egwuatu
The Nigeria Stock Exchange (NSE) has criticised the multiple taxation policies of the Federal Government and called on the National Assembly to speedily pass the bills on tax and other capital market reforms before it..
Speaking while reviewing the performance of the year in 2007, Director General of the NSE, Prof. Ndi Okereke Onyiuke said “ We hope that budget 2008 would be passed by the National Assembly in January 2008 as promised, so as to prevent any slow down in economic activities. Over time, we have brought to the fore challenges militating against stock market development in the country. These challenges include the incidence of multiple tax regimes on businesses and investors. Therefore, we urge the National Assembly to expedite action on all bills on tax and capital reforms currently before it. It should be noted that 80 per cent corporate tax is paid by quoted companies in Nigeria. Why is it difficult for the Federal Inland Revenue Services (FIRS) to understand that the economy cannot survive when the capital market pays 5 per cent Value Added Tax (VAT). So anybody that wants to reintroduce some of the abrogated taxes by past government without the necessary exposure draft which would have given opportunity for stakeholders input should be told that such move would kill the market and the economy in general.”
She further said “ No other stock exchange in the world charges VAT, not even the New York Stock Exchange adjudged to be the biggest in the world does so. If the FIRS do not step down on the action of 5 per cent VAT on every transaction, we would be forced to drag them to the International Court of Justice.”
Speaking further, she declared that the NSE is living up to its billing as an avenue for foreign investment in Nigeria.
According to her “ In 2007, foreign investors sustained their confidence in the Nigerian economy as represented by the Exchange. Their appetite for the Nigerian market remained strong, considering the high returns, liquidity and safety of investments. Statistics so far, showed purchases by foreign investors during the 2007 to be in excess of N256 billion, representing 12.3 per cent of the aggregate turnover.
This was an improvement over the N35 billion recorded in 2006.”
While reviewing the performance of the year, NSE DG disclosed that the Securities and Exchange Commission (SEC) had approved the guidelines for the administration of the Investors Protection Fund (IPF), stressing that the Fund have been incorporated at the Corporate Affairs Commission (CAC) in order to ensure its independence.
According to her “ The Board of Trustees will be appointed soon in the New Year and arrangement made to boost the Fund through additional contribution by members of the Exchange and other stakeholders.”
On the delay of issuance of share certificates, she said “ SEC and NSE has given December 31, 2008 as the deadline for the total phase out of the issuance of share certificates to be replaced by e-certificates.”
On the performance of the economy, she said “ The economy performed below projection, growing at an average of 5.81 per cent, as against the target of 10 per cent set for the year. Growth was driven principally by non oil sector as the continuing crisis in the Niger Delta area constrained crude oil exploration ad production.”
On the market performance, Onyiuke said “ The Nigerian stock market recorded a significant rise in activity as a result of high lending rates in the money market, improved macro economic performance, profit taking and stocks switching by investors.
