FG Begins to Take Tax on Bonds, Short-term Assets Belonging to Nigerians
- The Nigerian government has started collecting income tax on bonds and other fixed assets beginning this month end
- The Security and Exchange Commission issued a circular to the effect that every fund managers must pay the annual supervisory fee
- Analysts say that the new directive came a rude shock to many as that was totally unexpected at the beginning of the year
PAY ATTENTION: Click “See First” under the “Following” tab to see Legit.ng News on your Facebook News Feed!
The Nigerian government through the Securities and Exchange Commission (SEC) has started to collect income taxes on bonds and short-term assets.
In 2021, a court verdict excused bonds and short-term securities from Company Income Tax for ten years. The verdict has now expired.
Source: UGC
ThisDAY newspaper reports that The Nigerian government had extended a tax exemption to all bonds and debt instruments issued by all levels of governments and corporations.
Analysts have raised questions on the timing, saying investors will be discouraged from entering a space has liquidity challenges.
PAY ATTENTION: Join Legit.ng Telegram channel! Never miss important updates!
Proshare reports that the timing may raise questions. Some experts believe it may discourage investors from entering a space that has been facing liquidity challenges.
The SEC circular states every fund managers must pay the annual supervisory fee to the Commission by the end of January of every year.
According to the circular, payment of the yearly supervisory fee for 2021 will be based on NAV value as of December 31, 2021.
What the SEC says:
“The Commission hereby draws the attention of all registered Fund/Portfolio Managers to the SEC Rule on Annual Supervision Fees for Collective Investment Schemes (CIS) and Regulatory Fees for Discretionary and Non-Discretionary Funds/Portfolios issued on January 21, 2021, and the amendment thereto issued on December 20, 2021, which provides that: the payment for 2021 annual supervisory fee shall be based on the value of Net Asset Value (NAV) as of December 31, 2021, and Annual Regulatory fee for Discretionary and Non-Discretionary Funds/portfolios.”
The circular said Annual Supervisory Fee for Collective Investment Schemes (CIS) under Management will be 0.2 per cent of the net asset of every CIS under management, accrued and calculated daily each CIS.
What analysts say
Nairametrics reports that Akeem Akorede, an ALM Analyst at Coronation Merchant Bank noted that the SEC fee came as a shock to the Nigeria fixed income market.
He stated that the fixed income market has seen a significant drop in market capitalization.
According to Akorede, the new SEC fee came as a shock to market watchers in December. There have been several meetings among market stakeholders knowing the effect that the policy will have on market activities.
He said there have seen a significant drop in market capitalization of the fixed income market in the last two years with the market closing quietly several days.
FG to impose more taxes in 2022
Legit.ng reports that the minister of finance, Mrs Zainab Ahmed has said there might be an introduction of new tariffs and levies in 2022, stressing that the Nigerian economy was now on a recovery path.
She said that a couple of reforms and amendments had been recommended in the draft 2021 Finance amendment bill, adding that more will be introduced in the middle of 2022.
The minister said that there are ongoing legal cases in court against the federal government on VAT and Stamp Duties which was why the ministry stayed off those areas.
Source: Legit.ng
