Earlier this week, the Nigerian Stock Exchange (NSE) hosted a stakeholder symposium in collaboration with KPMG Nigeria, with the aim of highlighting the impacts the 2019 Finance Act is expected to have on the capital market.
According to a statement that was published on the NSE website, which detailed the outcome of the symposium, the new law is expected to favour the capital market. The Chief Executive Officer of the NSE (Oscar Onyema) actually described it as a landmark achievement.
According to him, the NSE had since 2014 lobbied policymakers, alongside other capital market stakeholders, for tax structures that will favour players in both the primary and secondary markets.
The Finance Act, which supposedly seeks to, among other things, promote fiscal equity and align domestic laws with global best practices, took effect on February 1st, 2020. Onyema said the NSE will, henceforth, continue to partner with tax experts such as KPMG towards navigating the provisions of the new law.
“The signing of the Finance Bill into law represents a landmark achievement for the Nigerian capital market. Since 2014, the Exchange alongside Securities and Exchange Commission (SEC) as well as other capital market stakeholders have been at the forefront of advocacy with policy-makers and tax authorities for favourable tax structures for primary and secondary markets activities in the Nigerian capital market.
“The NSE, in its efforts to support the growth of the Nigerian economy and its issuers, is, therefore, happy to collaborate with a leading tax expert, KPMG to highlight the implications of these new rules and provide guidance on how to effectively navigate the provisions of the bill, especially as it relates to taxes.”
On his part, the Head of KPMG Nigeria’s Regulatory and People Services, Wole Obayomi, also agreed that the 2019 Finance Act is a “landmark legislation” and that all concerned stakeholders should embrace it. He explained further that the new law accomplished the following:
- It removed multiple tax footprints for securities lending
- It will encourage real estate investment schemes which are expected to help stimulate activities in those segments of the market.
- The generous incentives for the small and medium enterprises (SMEs) in the Finance Act coupled with the launching of the Growth Board for capital raising by that sector from the Nigerian Stock Exchange, are timely interventions that will economic growth through SMEs.