ABUJA (Reuters) - Nigeria's finance ministry has scrapped stamp duties and VAT on stock market transaction fees, which between them come to 12 percent in some cases, seeking to boost capital markets, the minister said on Monday.
Addressing journalists in Abuja, Finance Minister Ngozi Okonjo-Iweala also said the government had written off around 22.6 billion naira in margin loans owed by stock brokers, after a financial crisis in 2009 triggered a state-backed bailout.
"These constitute a major disincentive to invest in the Nigerian capital market," she said, announcing the removal of duties and tax.
A 2009 crisis nearly led to the collapse of nine banks and prompted the central bank to intervene with a $4 billion bailout package. The stock market plunged 60 percent in the one year. But this year, it has been one of the world's best performing.
A state-backed "bad bank", AMCON, relieved them of their non-performing loans and nationalised three of the banks. The rescue left it nominally owed hundreds of billions of naira by various firms, including 84 stock brokers.
"This forbearance (on debt) will be accompanied with sanctions to discourage excessive borrowing behaviour by capital market operators in the future," Okonjo-Iweala said.
These included full disclosure to the regulator of any deals worth more than 25 million naira, no debt financing of more than 100 percent of capital and forbidding traders under debt relief from taking positions on their own accounts for at least a year.
Source: http://news.yahoo.com/nigeria-scraps-stamp-duty-vat-share-trades-053453759--business.html
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