THE Accounting Education and Research Services (ACCERS) has called on the government to mandate the Nigerian Stock Exchange (NSE) to set aside one per cent of transactions as market stabilisation fund.
The call was made via a communiqué issued at the end of the group’s two-day workshop on capital market in Lagos where its Chairman, Mrs. Morenike Babington-Ashaye, described the recent tax waiver extended to operators of the capital market as misguided.
Babington-Ashaye said short-term investors do not deserve any form of incentive. The taxation expert argued that the capital market does not need bracket waiver but measures that will stimulate long-term investment.
She argued that only those playing long-term support the original goal of the market since only their funds are available for investments that sustain economic growth.
Babington-Ashaye, who retired from the Federal Inland Revenue Service (FIRS) as a top management staff, observed that the government failed to carry out wide-ranging consultation before it announced the incentives aimed at boosting the capital market.
At the end of the two-day workshop, ACCERS issued a communiqué stipulating various measures the government ought to take to ensure stability in the market and the entire economy. It called for the re-introduction of capital market tax but at lower rates.
The group argued that individuals who operate at the capital market on short-term basis should be considered traders and subjected to personal and company taxes.
“In any financial year in which right issue is offered at a discount, such discount should be seen as dividend in the hands of the shareholders and should be taxed appropriately. NSE should ensure that such benefits, having been monetized, have the appropriate tax withheld and forwarded to the appropriate authority,” stated the communiqué.
It also drew attention to the manner mergers and acquisitions are sealed alleging that tax revenues are lost through the process. It urged IFRS to investigate previous mergers and acquisitions to determine where the country must have lost revenue in the deals and recover the lost funds.
Henceforth, it suggested, IFRS should be involved in all processes involving mergers and acquisitions to stop further loss of tax incomes accruable to the government.
ACCERS also recommended the granting of reliefs to companies that make loss where declaration is genuinely proved. This, it said, would increase the health status of quoted companies.
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