Re-Introduction of VAT on Market Transaction Charges Take Effect From July 25th, 2019

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Monday, July 22, 2019  / 04:00PM / By Proshare Research

VAT Charges on transactions in the Nigerian Capital Market suspended in 2014 will be re-introduced effective from July 25th, 2019. The charges suspended by a former coordinating minister of the economy and minister of finance, Dr. Ngozi Okonjo-Iweala was designed to encourage increased trading activities in the market.


In 2014, Dr. Okonjo-Iweala set up a committee to revive activities on the Nigerian Stock Exchange (NSE) following the financial crisis and extended periods of negative market sentiments recorded on the bourse in previous years.


Following the decision reached by the committee,  the minister announced a waiver of stamp duties and exemption of VAT on transactions on the Exchange.



Excerpts from her announcement stated that:

 “I will like to announce that the Federal Government has consented to waive the 0.075 percent stamp duties payable on stock exchange transaction fees; and, exempt from VAT, commissions:

(a) earned on traded values of shares,

(b) payable to the Securities and Exchange Commission (SEC), and

(c) payable to the Nigerian Stock Exchange (NSE) and the Central Securities Clearing System (CSCS); by including these commissions in the list of VAT-exempt goods and services.”


With the expiration of the five year exemption period on the order which took effect on 25 July 2014 and with no extension in sight, VAT will become effective from July 25th, 2019.


The table below shows VAT rates as they will apply to various charges on the NSE:


 Table 1  NSE Transaction Charges

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Market Performance

A review of the NSEASI and NSE Market CAP between Juy 25th 2014 and July 22nd 2019 reflected the the NSEASI dipped by-34.24% and the NSE Market CAP dipped by -2.94% within the period the VAT exemption was in effect. The dip in Market CAP translates into N410.09bn loss in naira terms.


Table 2  NSE ASI and Market CAP

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