NSE investors following the trend. [Photo/standardmedia.co.ke]
Investors are eyeing increased trade activities at the Nairobi Securities Exchange (NSE) after an exemption of share transactions from capital gains tax (CGT).The government will now charge 0.3 percent withholding tax on sales value. Treasury’s proposal to lower the minimum amount one can invest in government securities (Treasury bills and bonds) to Sh3,000 through the M-Akiba programme and exemption of stamp duty on Real Estate Investment Trust (REITs) and asset-backed securities are also seen to renew investors’ interest at the course. NSE said exemption of shares from CGT will improve liquidity to lift up overall volumes of shares being traded a key attribute that investors look for when investing in a stock market.Treasury announced it has scrapped the controversial five per cent CGT on shares transacted at the bourse, after stockbrokers rejected the role of collecting the tax, saying it was not their mandate. The change was a big win for stock brokers against the Kenya Revenue Authority, with concerns raised earlier pointing to the possible slowdown of activities at the exchange.Resistance by Kenya Association of Stockbrokers hampered implementation of the tax reintroduced at the beginning of the year by making it difficult to enforce. NSE chief executive Geoffrey Odundo said the reverse by Treasury will contribute greatly to the positioning of the new Nairobi International Financial Centre (NIFC) as an attractive and competitive investment destination.He, however, said the bourse will engage stakeholders to look in greater detail at how the withholding tax will be applied. “At a high level, Treasury has given a boost to investors and Kenya’s attractiveness as an investment destination. We have high ambitions for the role our capital markets will play in Vision 2030 in terms of creating long-term financial security and personal savings,” said Odundo.