Trading Floor of the Nigerian Stock Exchange

NSE: Equities investors to pay 0.08 percent stamp duty from December 7

Emmanuel Akosile | ConsumerConnect

Sequel to the classification of contract notes as an ad valorem tax by the Federal Inland Revenue Service (FIRS), investors in the Nigerian Stock market getting set for the implementation of the increase in the Stamp Duty from Monday, December 7, 2020.

The Nigerian Stock Exchange (NSE), in a statement Thursday, December 3, said stockbrokers had also been issued the requisite guidance to put in place the necessary measures to ensure compliance and communicate this change to investors in a timely manner.

The Stock Exchange, in November, had disclosed that any ‘buy and sell order’ on the Exchange would attract 0.08 percent Stamp Duty.

Hitherto, 0.075 percent was charged for the sale or purchase of securities on the exchange, including equities, exchange-traded fund (ETF), among others.

But now, the NSE stressed that this new development was necessitated by the FIRS classification of contract notes as an ad valorem tax.

The NSE stated: “As a responsive self-regulatory organisation, the Exchange is committed to enforcing rules and ensuring compliance with regulations and other applicable government requirements.

“While it had maintained a stamp duty rate of 0.075 per cent in line with what was obtainable in the Nigerian capital market, it is imperative that the FIRS’ stamp duty regime of 0.08 per cent on securities transactions is applied.”

It said Capital market stakeholders requiring further information can refer to the market circular issued by the exchange on November 17, 2020, captioned Administration of Stamp Duty on Securities Transactions, which can be accessed on the exchange’s website at http://www.nse.com.ng.

The Exchange further said: “Investors are also advised to contact their respective stockbrokers for more information or clarification.”

It stated that that in preparation, the Central Securities Clearing System (CSCS) Plc had taken steps to adjust its system to implement the automated deduction of the stamp duty rate of 0.08 percent from Monday.