‘VAT INCREASE WILL PRESSURE STOCK PRICE, REDUCE PATRONAGE’
Written by thereachfm on March 25, 2019
Capital market experts say the proposed upward review of Value Added Tax (VAT), will further depress stocks’ price and increase transactions cost in the bourse.
This comes as every purchase or sale of shares by stockbrokers to investors attracts 5% VAT as commission on the Nigerian Stock Exchange (NSE).
Operators, who say they are worried about the pronouncement, argue that further increment would cause more apathy on the already depressed market and reduce investors’ patronage.
The operators further add that any increase in VAT can only be productive if it is part of a broad fiscal strategy of rebalancing the tax mix in favour of consumption tax, which will entail lowering the company income tax.