Corporate bonds and short term government securities now tax free

In March 2010, the Federal Government through the Debt Management Office announced the approval by the Federal Government of Nigeria to grant tax waivers for all categories of bonds (including corporate bonds) and short term government securities such as treasury bills. The announcement also included a reduction in stamp duties for re-issue of previously executed debentures to 20% of the stamp duty payable on a new debenture.

Unfortunately, the declaration made in 2010 was at best a statement of intent which can only take effect subject to administrative and legislative processes required to give the necessary legal backing.

Furthermore, the President in the 2012 Budget Speech delivered to the National Assembly in December 2011 again stated government’s intention to grant tax waivers on all bonds and debt instruments issued by all tiers of government and corporate entities.