SEC Seeks to Revive Stock Market with Tax Incentives

The Securities and Exchange Commission (SEC) has said tax rates on investments in the capital market need to be reviewed downward by the necessary authorities to douse the tension arising from the global financial meltdown and restore investors’ confidence in the market. 
Also, the Council of The Nigerian Stock Exchange (NSE) has announced the suspension of Nova Finance & Securities Limited for manipulating the share price of African Petroleum (AP) Plc.
The downward review of tax rates, which is being canvassed as part of incentives, would also help the capital market to make quick recovery, SEC said.
The Director-General, Mr. Musa Al-Faki, said at the round table forum on tax incentives and waivers in the Nigerian capital market, which held yesterday in Abuja, that the participants should consider the role tax incentives could play in bringing about a faster pace of discovery for the market as well as ensuring its stability and sustainable growth in the future. 
He said: “Investors in our market are still charged a 10 per cent withholding tax on dividends they receive on their investments irrespective of how much the dividend is. 
“This is in addition to the value added tax (VAT) and other taxes charged issuers of securities in the primary market and on transactions in the secondary market.” 
Al-Faki emphasised the need to consider the role of tax incentives in reviving the capital market and ensuring its sustainable growth as well as a tax regime that would encourage sustained investments in the capital market. 
He also canvassed the need for the government and all stakeholders to evolve strategies towards inducing the recovery and development of Nigeria’s capital market as well as strengthening its global competitiveness for inflow of funds from other countries.  
Al-Faki noted that on its own, SEC had since the eruption of the global economic crisis constituted two industry-wide committees to review the market structure and procedures as well as the code of corporate governance. 
Al-Faki gave assurances that the recommendations of the committees shall be vigorously implemented by the Commission.
The market has lost N8 trillion or 63 per cent in terms of market capitalisation since the meltdown began March 6, 2008.
The market capitalisation has fallen from N12.6 trillion to close at N4.6 trillion, while the index depreciated from a peak of 66,371.20 to below 20,000.