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Market operators task FIRS Chair Nami on VAT, investments

FIRS Headquarters, Abuja, FCT

* Say taxes discourage investors, urge Executive Chairman to learn from predecessor’s mistakes

Isola Moses

The Nigerian Capital market operators have urged the leadership of the Federal Inland Revenue Service (FIRS), led by Mr. Muhammed Nami, Executive Chairman, to ensure the removal of Value Added Tax (VAT) and Withholding Tax (WHT) on stock market transactions to boost investments in the country.

The market operators expressed this in separate interviews with News Agency of Nigeria, Tuesday, December 10, 2019, in Lagos, while reacting to President Muhammadu Buhari’s appointment of Mr. Muhammad Nami as the new Executive Chairman of FIRS.

President Buhari appointed Nami to replace Mr. Tunde Fowler, whose tenure expired on December 9.

They said that VAT on Capital market investments as well as withholding tax on dividends were discouraging investors from the market.

Commenting on the tax regime, Mr. Sola Oni, a chartered stockbroker and Chief Executive Officer, Sofunix Investment and Communications, urges Nami to collaborate with market regulators and operators on taxes discouraging people from investment.

“In our Capital market, the issue of tax has always been a disincentive to investment. For instance, withholding tax on the dividend which has become a thing of the past in many markets has suddenly found its way back.

“Besides, VAT has raised dust several times. The challenge is that taxes increase the cost of the transaction. This is at variance with global best practices,’’ Oni said.

According to him, tax matter in Nigeria has always been a subject of controversy and not equitable.

He stated that “those who believe that they benefit nothing from the government are always the people that carry the burden,” adding, “the belief is that the very few that control the bulk of economic activities are the tax evaders.”

“It is, therefore, not surprising that most micro-enterprises are always at the mercy of tax authorities whereas they are benefiting nothing in terms of infrastructure.

Comparatively, the chartered stockbroker and company executive maintained that “in advanced countries, nobody wants to evade tax because infrastructure is provided by the government to create the robust enabling environment for businesses too.’’

Malam Garba Kurfi, Managing Director, APT Securities and Funds Limited, also called for the removal of VAT on Capital market transactions.

Kurfi advised the new FIRS Chairman should harmonise various taxes for easy administration and better returns in the country.

Nami should map out strategies that would raise the country’s contribution of tax revenue to Gross Domestic Product (GDP), he said.

In his remark, Mr. Moses Igburde, Publicity Secretary, Independent Shareholders’ Association of Nigeria (ISAN), urged the new FIRS boss to learn from the mistakes of Fowler.

Mr. Igburde said that the new chairman should address “issues of multiple taxation and gangster way of collecting taxes from taxpayers.”

According to him, FIRS should engage the companies and other taxpayers rather than adopting gangster approach.

He suggests “FIRS must leverage technology and modern infrastructure to collect and monitor tax collections,” and charges FIRS to introduce friendly tax policies that would encourage companies to pay their taxes willingly.

He emphasised that taxpayers would be willing to pay taxes if government at all levels ensure provision of the needed infrastructure, security as well as ease of doing business in Nigeria.

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