- No country can tax its way to prosperity – KPMG
In Monday’s trading session, the domestic equities market experienced a modest decline, with the All-Share Index decreasing by 0.53 percent to settle at 97,708.74 points.
Investor sentiment leaned towards divestment, particularly in shares of SEPLAT (-10.00%), PZ (-9.91%), ETRANZACT (-9.68%), UNITYBANK (-8.20%), and NASCON (-7.50%), resulting in a slight moderation in the market capitalization of listed equities by 0.53 percent to N55.26 trillion. This translated to a total reduction of N297 billion in investor wealth.
Across sectors, the day’s performance painted a predominantly bearish picture, with the Banking, Insurance, Consumer Goods, and Oil/Gas indexes contracting by 0.75 percent, 0.64 percent, 0.33 percent, and 5.90 percent, respectively.
However, the Industrial Goods index remained unchanged. Despite the higher number of losers (24) compared to gainers (19) on the Exchange, trading activity levels exhibited resilience. Total deals, volume, and value all witnessed notable increases of 1.29 percent, 27.51 percent, and 51.25 percent, respectively, totaling 8,607 trades, 439.10 million units, and N11.38 billion.
As the trading session drew to a close, NOTORE emerged as the most traded security in terms of volume and value, with 74.43 million units worth N4.65 billion transacted in a single trade.
In the money market, NIBOR rose across the board for all maturity gauges tracked due to tightening liquidity conditions. Short-term benchmark rates such as the open repo rate (OPR) and overnight lending rate (OVN), advanced by 0.86 percent and 0.99 percent to reach 28.86 percent and 29.61 percent, respectively. NITTY traded lower for most tenor buckets. The average secondary market yield on Nigerian Treasury Bills cleared lower by 4-basis points, to close at 21.37 percent.
In the secondary market for FGN Bonds, trading activity was slightly on the bearish side, as the average yield increased by a base point to 18.62 percent. In the sovereign Eurobonds market, sell sentiment was evident across all segments of the yield curve, resulting in an increase in the average yield by 0.13 percent to 9.82 percent.
In the foreign exchange market, the Naira depreciated against the dollar by 0.80 percent to close at ₦1,478.11 per dollar in the official market. In the parallel market, the Naira closed at ₦1,480 against the US dollar.
Cybersecurity levy: No country can tax its way to prosperity – KPMG
Meanwhile, global tax and advisory firm, KPMG has criticized the Nigerian government on its move to implement the 0.5 percent cyber security levy as stipulated in the Cybercrime Amendment Act 2024.
Although President Bola Tinubu has suspended the implementation of the levy following public outcry, the global tax firm argued that no country could tax its way into prosperity.
Commenting on the new levy, the company argued that there was empirical evidence proving that higher taxes would not lead to sustainable growth.
In a tax alert statement it issued on Monday through its head, Tax, Regulatory and People’s Services, Wale Ajayi, the firm raised concerns over the timing of the Act’s implementation, considering the country’s prevailing economic conditions.
It further noted that the need for revenue mobilisation in the face of significant challenges warranted the implementation of the levy even though the law had been there since 2015.