November 21, 2020
Further to the Public Notice by the Federal Inland Revenue Service (“FIRS”) on Monday, 20th July, 2020 itemizing Contract Notes at an ad valorem rate of 0.08%, please be notified of an adjustment in Stamp Duties charged on transactions carried out via the Nigerian Stock Exchange (“NSE“) from 0.075% to 0.08%, effective 7th December 2020.The Central Securities Clearing System Plc. (CSCS) will adjust its system to implement the automated deduction of the Stamp Duty rate of 0.08% on the effective date.
Below is the content of the circular from the NSE
Administration of Stamp Duty on Securities Transactions
We refer to the Public Notice in the Business Day Newspaper of Monday, 20 July 2020, captioned ‘Clarification of Administration of Stamp Duties in Nigeria’ issued by the Federal Inland Revenue Service (FIRS) (A copy is attached as Appendix A for ease of reference).
The Public Notice provided, amongst other things, information on dutiable instruments and the applicable flat or ad valorem rates, with Contract Notes1 itemized at an ad valorem rate of 0.08%. As you know, this is at variance with the current rate of 0.075% being administered in the Nigerian Capital Market.
To that extent, Dealing Members of The Nigerian Stock Exchange are to note the following:
- Effective 7 December 2020, the Central Securities Clearing System Plc. (CSCS) will adjust its system to implement the automated deduction of the Stamp Duty rate of 0.08%;
- Dealing Members are required to immediately engage their software vendors for the required adjustments to their technology applications, to reflect the 0.08% rate ahead of the effective date of 7 December 2020; and
- Dealing Members are required to communicate the changes above to their clients immediately, ahead of the effective date.