Lagos – Stockbroking firms in the nation’s capital, Abuja have been accused of milking unsuspecting clients of several billions of naira of unremitted stamp duties for market transactions.
– Investigation revealed that the stamp duties are not remitted to relevant government agencies by the firms.
The malpractice has not been checked since the Stamp Duty Act of 2004 had put two government agencies- Federal Inland Revenue Service (FIRS) and the Nigeria Postal Services (NIPOST) at each other’s throat over whose responsibility it is to collect contract stamp fees.
The Securities and Exchange Commission (SEC), the regulatory agency for the capital market had fixed contract stamp fees at the rate of 0.075 per cent of value of shares traded in the stock market.
Competent sources told Independent that these charges, which were always added to clients’ cost at the point of transaction, were remitted to neither NIPOST nor FIRS as required by law.
This exploitation by the stockbrokers has been going on despite the announcement in 2012, by the last administration, eliminating the 0.075 per cent stamp duties payable on stock market transactions and the exemption from the Value Added Tax on commissions earned on traded values of shares.
This decision, which was applauded by investors and other stakeholders in the capital market, was aimed at providing incentives to invest in the Nigerian capital market, as taxes on transactions were as high as 12 per cent, much higher than in other sectors.
A top official of NIPOST, Abuja, who would not want to be identified, said the issue had become a nagging problem for the agency, adding that for more than 10 years, the service had raised the alarm over unremitted stamp duties by the stock broking firms amounting to billions of naira, arising from market transactions.
The source said that at a stage, the matter was taken to the high court, but would not disclose the outcome of the litigation.
The SEC source who craved anonymity, said although the commission was not unaware of the development, the regulator was hard put to clampdown on the erring stockbroking firms in view of the downturn of events in the market.
Also, some stockbrokers, who preferred not to be named, said the difficult time they are facing in the market predisposed them to look for means of survival, adding that in most cases, the clients themselves did not know what constituted their commissions.