The Securities and Exchange Commission (SEC) has urged the Federal Government to consider the commission’s proposal for corporate bonds to be exempted from tax payment.
The Director-General of SEC, Lamido Yuguda stated this over weekend while speaking with the media on the outcome of the second capital market committee meeting for the year, 2022.
Recall that in 2012, the Federal Government exempted bonds and short-term government securities from income tax for 10 years, the period elapsed on January 1, 2022.
Yuguda said that reinstating the tax exemption will improve the attractiveness of the bond market.
He said, “We observed that the world is facing high inflation and low growth. Consequently, the World Bank, the International Monetary Fund and other Economic forecasters are trimming down growth estimates with forecasts reflecting sizable downgrades to the outlook for the rest of the year and 2023.
“The Commission continues its engagement with the Minister of Finance, Budget and National Planning on the request for tax exemption for corporate bonds.
“For any asset class, the investment is a function of many considerations. Tax is just one of those considerations, although it is only one, it is an important consideration especially when the tax rate is high.
“So, I think for now, given that there are so many considerations, and considering all these factors, we feel the tax rebate should be reinstated and we have been working with the tax and fiscal authorities to advocate the return to the status quo.”
Yuguda also said that the revised Nigerian Capital Market Master Plan (2021 – 2025) which was in June submitted to Minister of Finance, Budget and National Planning, would be launched in November, following approval by the Federal Government.
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.
