• Purchase – Stockbrokers in Nigeria will charge an investors a maximum of 1.855% of the purchase consideration whenever you want to buy stocks
  • Sell – Stockbrokers in Nigeria will charge an investors a maximum of 2.4% of the purchase consideration whenever you want to buy stocks.
  • The total fees charged does not only belong to the stockbrokers
  • Stockbrokers make money from you whenever you buy or sell shares

Charges are integral cost of investing if you are new to investing in the Nigerian Stock Market. Stockbrokers, charge you commission and fees whenever you want to buy or sell shares. The fees and commissions charged are statutory and approved by the security and exchange commission.

Do we get taxed?

Nigeria does not tax gains obtained from buying and selling shares in Nigeria. However, Value Added Tax (VAT) is levied on some of the fees and commissions charged by the stockbrokers.

Why are we charged VAT if sale of shares in tax exempt.

The law views the activities of the stockbrokers, CSCS and NSE as services and therefore expect that VAT be charged on the commission and fees. Since the commission and fees charged are for the services rendered, it is only logical that VAT will be charged.

Are the charges uniform

The charges are applicable to all stockbrokers across the country. However, stockbrokers can charge a little below their own portion of the commission and fees. They often do this to instigate competition and lure away potential investors from trading with their competitors. Stockbrokers can only thus reduce their own charges but cannot reduce the fees charged by SEC and NSE.

All charges are a percentage of the purchase consideration.

Owner RATES VAT TOTAL
Stockbrokers Commission 1.35% 5% 1.42%
SEC Fees 0.30% Nil 0.30%
CSCS Fees 0.06% 5% 0.06%
Stamp Duties 0.075% Nil 0.08%
TOTAL     1.856%
Owner RATES VAT TOTAL
Stockbrokers Commission 1.35% 5% 1.418%
NSE Fees* 0.50% 5% 0.525%
CSCS Fees 0.36% 5% 0.378%
Stamp Duties 0.08% Nil 0.08%
TOTAL     2.396%

 

Who collects the charges

Stockbroker – They collect a brokers commission of 1.35% of the consideration, when you want to buy or sell. An additional vat of 5% brings the total to 1.4175%.

SEC – They collect a fee of 0.3% of the consideration, when you want to buy. They do not charge vat and don’t charge for selling.

*NSE – They charge a fee of between 0.3% and 0.5% of the purchase consideration. They also charge a VAT of 5% of the fee.

CSCS – They charge a fee of 0.06% of the purchase consideration. An additional 5% of the fee is charged as VAT. CSCS charges another 0.03% of the purchase consideration when you sell and charge a further 5% of the fee as VAT.

Stamp Duties – The Federal Inland Revenue charges a stamp duty of 0.075% of the purchase consideration. They do not charge VAT.