Stakeholders in Nigeria’s capital market have emphasized that excessive tax burdens discourage both local and foreign investors from participating in the capital market, calling for harmonization of taxes to create an attractive investment environment.
Recall that the President had stated during his inauguration speech that his government would review all the complaints of local and foreign investors about multiple taxations and various anti-investment inhibitions.
Managing Director of Crane Securities Limited, Mike Eze said there is a need to harmonise the tax system because the multiplicity of taxes is taking a toll on shareholders.
“It is scaring people away from investing in the nation’s capital market. Both local and foreign investors need to be encouraged by harmonizing the taxes.
“A shareholder pays annual income tax as a citizen and as a shareholder in a company, the company pays him a dividend, and by law, he is required to pay 10 per cent VAT on the dividend he earned from the company.
“There is also a capital gain tax on the profit made from the sale of shares. Outside of that, if he is running a business, there are various taxes he will be required to pay to the local government and State.”
He noted that both foreign and local investors are not being encouraged to take an investment decision due to the multiple taxations they face in the capital market and the country.
Former President of the Chartered Institute of Brokers (CIS) and the Managing Director of Arthur Steven Asset Management Limited, Olatunde Amolegbe, explained that when a country does not have harmonised taxation regime, it makes the economy of such country uncompetitive because investors want to be certain of their tax liability before they take an investment decision.
