Nigeria Stock Exchange (NSE) has notified capital market operators (CMOs) that from next month stamp duty on the assets traded on its platform will be upwardly adjusted.
At the moment, the trading of shares, bonds, ETFs and other instruments on the exchange attracts a stamp duty rate of 0.075 per cent.
A circular issued on Tuesday, November 17, by the NSE said investors will have to pay 0.08 per cent as stamp duty for every buy and sell order executed on the NSE through a broker from Monday, December 7.
In preparation for this new adjustment, stockbrokers have been directed to update their systems from the effective date. They have also been ordered to inform their clients ahead of time of the new rate.
It was disclosed that the Central Securities Clearing System (CSCS) Plc will adjust its system to implement the automated deduction of the stamp duty rate 0.08 per cent from December 7.
“We refer to the public notice in the Business Day Newspaper of Monday, July 20, 2020, captioned Clarification of Administration of Stamp Duties in Nigeria issued by the Federal Inland Revenue Service (FIRS).
“The public notice provided, amongst other things, information on dutiable instruments and the applicable flat or ad valorem rates, with contract notes itemized at an ad valorem rate of 0.08 per cent.
“As you know, this is at variance with the current rate of 0.075 per cent being administered in the Nigerian capital market.
“To that extent, dealing members of the Nigerian Stock Exchange are to note the following: 1. effective December 7, 2020, the CSCS will adjust its system to implement the automated deduction of the stamp duty rate of 0.08 per cent; 2. dealing members are required to immediately engage their software vendors for the required adjustments to their technology applications, to reflect the 0.08 per cent rate ahead of the effective date of December 7, 2020; and 3. dealing members are required to communicate the changes above to their clients immediately, ahead of the effective date. Please be guided accordingly,” the notice read.