Tax Payment: SEC Advocates Compulsory Listing Of Companies On Stock Market

Tax Payment: SEC Advocates Compulsory Listing Of Companies On Stock Market
Patrick Aigbokhan
The Securities and Exchange Commission (SEC) has recommended compulsory enlistment of companies operating in Nigeria on the stock market as a measure to ensure payment of tax by those companies.
Mounir Gwarzo, Director General, SEC, who made this known at a forum with journalists in Lagos, explained that greater proportions of companies that pay tax in Nigeria are those that are listed on the Exchange, hence, the need to encourage more companies to list.  .
Gwarzo also stressed the need for the Federal Government to include stock market listing as one of the conditions for companies seeking to secure government contracts to qualify for such contracts. This, he said, will force companies that wish to enjoy such contract to seek listing in the stock market 
He said: “one way of ensuring that companies pay tax is when those companies are listed. If you look at the statistics of companies that pay tax in Nigeria, greater proportions of them are companies that are listed on the Exchange. So, within the mantra of this government, which is to ensure that all those linkages are closed, I think that government should ensure that all those companies are listed.
“Some of us are of the opinion that government should even come up with a policy that for any company that will enjoy government contract up to certain amount of money, it must be listed, because for you to be listed, it means that there is transparency and you are likely to have better governance and certainly, you cannot run away from paying tax.” He stated that the Commission is already in talks with telecos to list and has reached an advanced stage with them.
“Like I said, listing is certainly going to be one of the key initiatives that the governing council will look at next year. Luckily enough, there is conversation already with telecoms on the need for them to be listed. At one point, we reached an advanced level with them. Some of the issues they raised, we were able to assure them that we will address them.
“At one point, we said you can actually be listed on the Exchange without necessarily raising funds and we think even some of them that don’t need fund could still be listed.” Speaking listing by small and medium enterprises, Gwarzo said there is need for the federal government to introduce incentives like tax holidays to encourage more of them to list.
“We are looking at what we need to do that we have not done in terms of encouraging the listing of SMEs. Luckily enough, within the growth and emerging markets, a very robust and comprehensive report was done. The International Organisation of Securities Commission (IOSCO) committee on SMEs set up a three-member committee to look at how we can encourage the listing of SMEs within the growth and emerging markets; the report has been submitted and we have shared with key stakeholders.
“We have looked at the report and seen areas we need to improve on and one of the things we have discovered is the issue of incentives. “Government must come up with incentives that any company that is listed the under SME that has operated for just two to three years, there will be tax exemption. So, when we finish with that report, we will look at areas that that government can do. We think government can give them tax waiver to encourage them to list.”