Investments can be guaranteed safe passage if transaction cost and multiple tax audits in the Nigerian capital market can be reduced or eliminated.
This was the view of experts at 6th Triennial Delegates’ Conference organised by the Independent Shareholders’ Association of Nigeria (ISAN) in Lagos yesterday.
Delivering a lecture: ‘the role of taxation in developing the Nigerian capital market’, Partner, Financial Service Industry Group at Deloitte Tax Function, Taiwo Okunade, noted that Nigeria is lagging behind in the ease of paying taxes, adding that the government have not made it easy for companies or every tax payer in the country to be paying taxes.
Okunade explained that multiple tax audits as well as transaction cost may discourage risky investments even when the expected values of such investments exceed those of investments with less variance in possible outcomes.
He said: “For the government to encourage investment in the capital market, then transaction cost should be as low as possible because you do not want to know if at the point of putting your money in an investment, your money might be reduced by 10 per cent that will be charged to you at that point. Also, the government can reduce transaction cost by eliminating VAT completely on commission and fees that an investor will have to pay stockbrokers when they are investing their money.
The other thing is elimination of multiple tax audit. There has got to be harmonisation of audit under the umbrella of the Joint Task Force to conduct a single audit instead of different agencies doing different tax audits”
Okunade thereafter urged the government to come up with a mechanism for collaboration between the Federal Government and the state government to reduce multiple tax audits on tax payers.
For his part, ISAN National Coordinator, Adeniyi Adebisi, while speaking on the lecture titled, “Capital Market as a Barometer of a Nation’s Economy”, explained that making and implementing policies that will enhance national interests rather than selfish or clannish interests and personal aggrandisement is key to the growth and development of the capital market as well as the economy.
Adebisi said that corporate managers work generally against the background of successive government’s policies and policies implementation while adding that where these policies are good, steady, and well implemented, managers work better and achieve more.