Stockbrokers shelve threat to stop NSE trade over tax row
What you need to know:
It remains to be seen if the the KRA will take any action given that stockbrokers have said that they have been unable to collect the tax.
The Nairobi Securities Exchange opened trading normally on Friday after stockbrokers cancelled a plan to cease trading over the capital gains tax dispute.
The Kenya Association of Stockbrokers and Investment Banks (KASIB) had caused a stir on Thursday when they announced that members would not be trading as usual on the market for a month effective February 20.
The decision to trade as usual has spared the market from a damaging interruption which would have had wide reaching financial consequences not just for stockbrokers but also for investors.
The stockbrokers met with the Capital Markets Authority Thursday evening, which resulted in the about turn late Thursday night that was communicated in a short statement without revealing the details of the consultations.
“Following consultations, and in the interest of maintaining the sanctity and stability of the capital markets in Kenya, the Council of KASIB has further resolved that they shall not suspend trading services and that the Exchange shall operate as normal on February 20, 2015,” said KASIB in a statement.
A senior manager at a stockbroker Business Daily spoke to however said that the regulator had assured them that it is working to have the issue resolved. The matter is also before the High Court.
“We are hopeful that CMA will assist us to arrive at an amicable solution,” said the stockbroker.
With the deadline for filing the returns of the tax that was supposed to be collected in January lapsing Friday, it remains to be seen if the the Kenya Revenue Authority (KRA) will take any measures given that stockbrokers have said that they have been unable to collect the tax.
KRA commissioner-general John Njiraini said on January 27 that deferring the tax remains one of the options on the table to allow for time to agree on implementation with stockbrokers.
The NSE planned to open the market to trading as usual on Friday morning, leaving the trading participants to decide for themselves whether to honour client orders as stipulated in their licence terms.
CMA had indicated that action would be taken against those who would keep away from the market, insisting that all stockbrokers have a legal responsibility to render services in accordance with the law and regulatory responsibilities attached to their licences.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
