In line with a string of recent policies aimed at creating an enabling environment for businesses and attracting investment into the economy, the Nigerian government plans to introduce more tax incentives for investors in the capital market, a minister said this week.
This would be in addition to existing tax provisions in the recently signed Finance Act, which is expected to help deepen the market in the areas of Real Estate Investment Schemes (REITS) and securities lending.
Any of such new incentives and policies will be formulated in collaboration with the Nigerian Stock Exchange (NSE), Finance Minister Zainab Ahmed said, with the goal of encouraging investment and help to further boost the market.
“We have asked the Nigeria Stock Exchange to continue to work with us so that we can encourage Nigerians to invest more in the market,” Ahmed said during a courtesy call to the Exchange. “We have a lot of resources locally and we are working with the NSE to ensure we mobilize resources through the market.”
The Nigerian government has been looking for ways through various policies to attract more investments into the local capital market and the new finance law keys into that vision, offering a number of incentives for investors. But industry experts had called for more incentives after the law was ratified earlier this year, to enable capital flow into the market.
“I want to say that we appreciate the government for the Finance Act of 2019 and a number of initiatives that are in support of the capital market,” said Mary Uduk, acting Director-General of the Securities and Exchange Commission. “The government has through the Finance Act answered some of our prayers.”
Uduk, however, noted that the commission “expected more” because it had been on the initiatives for many years with the federal tax agency and other relevant stakeholders. “There are others that we thought they would have done like the issue of taxes… We will continue to push for more tax reductions in different areas,” she said.
A supportive macroeconomic framework involving fiscal, monetary, exchange rate and capital accounts policies is generally considered crucial for the development of the domestic capital market. And fiscal initiatives, such as tax incentives, is “very critical” in driving both local and foreign investments to the capital market and the economy at large, Uduk added.
Source: Ventures Africa