SEC seeks Removal of Corporate Bonds from Tax Payment

• The Securities and Exchange Commission (SEC) has called on the Federal Government to consider its proposal to exempt corporate bonds from the payment of tax.

The Director-General of SEC, Lamido Yuguda made the call during a media parley on the outcome of the second capital market committee meeting for the year, 2022.

The Federal Government had in 2012, exempted bonds and short-term government securities from income tax for 10 years, which recently expired on January 1, 2022.

In his speech SEC DG said the decision to seek tax exemption would help to unlock the attractiveness of the corporate 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.”

The SEC DG also said that the revised Capital Market Masterplan would be launched by November following approval by the federal government.

The Capital Market Master Plan Implementation Council had in June this year, submitted the revised Nigerian Capital Market Master Plan (2021 -2025) to the Minister of Finance, Budget and National Planning.

Guardian/Hauwa Abu