The CMA (Capital Markets Authority) has put in place several tax incentives to encourage investments in capital markets. Highlight some of the tax incentives the Capital Markets Authority.

CPA-Financial-Management-Section-3 Revision kit

The tax incentives to encourage investments in capital markets are:
– Capital gains are tax exempt
– New quoted firm with effect from 1st January 2003 will have a lower corporate tax rate of 25% p.a for the first 5 years of quotation.
– Venture capital firms enjoy a ten year tax holiday
– The withholding tax on dividends is only 5% which is final tax
– Flotation costs of newly quoted firms and tax allowable expenses
– The transfer of securities is exempted form stamp duty and VAT
– Income of collective investment scheme is tax free.

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