The federal government will today commence the collection of income tax on bonds, short-term securities. This followed the expiration of a 2012 gazette which exempted Companies Income Tax (CIT) from bonds and short-term securities in the past 10 years.
The federal government had in 2012 granted tax waiver on all bonds and debt instruments issued by all tiers of government and corporate entities. But the Securities and Exchange Commission (SEC) had last month introduced a 0.025 per cent charge on fixed income (Bonds) secondary market transactions, which was expected to become effective today.
The capital market regulator had in a circular explained: “It will charge 0.025 per cent of the total value of all secondary market transactions on bonds, while the Securities Exchange on which the transaction occurs will charge an amount not exceeding 0.025 per cent of the total value of secondary market transactions on bonds while bond transactions by dealing members will attract a single regulatory fee of 0.0001per cent of the total value of the secondary market transactions on bonds, and are exempt from the 0.025per cent fee charge earlier stated.”