Following the president’s approval on the Tax Laws Amendment Act 2020, stockbrokers have started to charge the 14 percent value-added tax (VAT) on service fees and commission something that will raise the cost of investing in equities and security at the NSE.
ApexAfrica Capital and Dyre & Blair have both notified their investors on the changed fees and commission.
“Going forward, the purchase of shares the amount will include the purchase price, brokerage commissions, statutory levies plus VAT. As for the sale of shares, the proceeds will be paid net of brokerage commissions, statuary levies plus VAT,” said ApexAfrica.
Dyre & Blair owner, Jimnah Mbaru ordered that all trades done after April 27, and were not charged VAT will be taxed manually from the clients’ accounts.
“Please note that the trade contract notes will be amended to reflect this VAT cost as of May 18, 2020. For prior transactions done between April 27, 2020, to May 15, 2020, the VAT will be computed manually and charged to your account,” said Dyer &Blair.
The VAT will apply to commission on equities and bonds trade, private transfers, fees on share immobilization, and pledges. Transmissions in and transfers out, advisory fees charged for placement, initial public offerings, rights, and takeovers.