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Nigerian Capital Markets Newsletter

Nigerian Capital Markets Newsletter

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Published by Blackfriars LLP
Capital Market Crisis in Nigeria: SEC Promotes Tax Incentives as Bailout

There are strong indications that in the wake of nearly seventy percent shrink of the quoted shares on the Nigerian Stock Exchange; the Securities and Exchange Commission (SEC) is seeking tax incentives as a bailout option for the current crisis in the capital market.


According to the SEC him, tax incentive as a fiscal policy adopted by government would be designed to grant individuals or corporations exemption from, or reduction in, their tax liabilities with a view to increasing savings and investments in particular markets or sectors of the economy.
In addition to a proposal made to the government by SEC on this policy, the Director General of SEC, Mr. Musa Al-Faki, has been publicly canvassing for tax reductions and waivers as a form of “bailout” for the beleaguered capital markets.
The policy initiative by SEC is anchored on the precedents set with the industrial, energy, tourism, telecommunications and export sectors of the economy. SEC has argued that tax incentives in the capital market were intended to achieve broad objectives like:
• Encouraging investors to purchase securities so that companies will have more funds available for economic activities;
• Encouraging corporate entities to seek listing on the stock exchange so as to enjoy the benefits of the capital market;
• Yielding good returns on investment, so as to boost the much needed confidence of investors.
Irrespective of tax incentives granted, the SEC has posited that the positive results of a tax waiver programme would include increase in the number of listed companies, thus leading to increased supply of long-term investible funds necessary for sustainable growth of the economy.

Capital Market Crisis in Nigeria: SEC Promotes Tax Incentives as Bailout

There are strong indications that in the wake of nearly seventy percent shrink of the quoted shares on the Nigerian Stock Exchange; the Securities and Exchange Commission (SEC) is seeking tax incentives as a bailout option for the current crisis in the capital market.


According to the SEC him, tax incentive as a fiscal policy adopted by government would be designed to grant individuals or corporations exemption from, or reduction in, their tax liabilities with a view to increasing savings and investments in particular markets or sectors of the economy.
In addition to a proposal made to the government by SEC on this policy, the Director General of SEC, Mr. Musa Al-Faki, has been publicly canvassing for tax reductions and waivers as a form of “bailout” for the beleaguered capital markets.
The policy initiative by SEC is anchored on the precedents set with the industrial, energy, tourism, telecommunications and export sectors of the economy. SEC has argued that tax incentives in the capital market were intended to achieve broad objectives like:
• Encouraging investors to purchase securities so that companies will have more funds available for economic activities;
• Encouraging corporate entities to seek listing on the stock exchange so as to enjoy the benefits of the capital market;
• Yielding good returns on investment, so as to boost the much needed confidence of investors.
Irrespective of tax incentives granted, the SEC has posited that the positive results of a tax waiver programme would include increase in the number of listed companies, thus leading to increased supply of long-term investible funds necessary for sustainable growth of the economy.

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Categories:Business/Law, Finance
Published by: Blackfriars LLP on May 03, 2009
Copyright:Attribution Non-commercial

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05/11/2014

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