Amid concerns that Nigeria’s 30 percent Capital Gains Tax (CGT), highest in history, will put the nation’s stocks at risk, Taiwo Oyedele, chairman, Nigeria’s Presidential Committee on Fiscal Policy and Tax Reforms feels otherwise following his recent answers to some frequently asked questions.
- Here’re Oyedele’s answers to other frequently asked questions…
- ???? ?? ??????? ????? ??? (???)?
- ??? ???? ??? ??? ??? ??????? ??????????
- ?? ???? ?????? ????? ?? ???????? ?????????? ????????
- ???? ????? ??????? ??????????
- ???? ????? ??????? ???? ??????? ???? ?????????? ??? ???????????
- ???? ??? ??? ?????? ????? ???? ?? ??? ??????? ???????
- ?? ??? ??????? ??????? ????????? ??? ???????? ???? ??????
- ???? ?? ????? ??????? ???? ???????
Since the announcement of federal government plans to increase capital gains tax (CGT) from 10 percent to 30 percent, many stakeholders, including those in the capital market have expressed concerns regarding the changes introduced to the capital gains tax regime under the new tax reform laws effective from January 1, 2026.
Recently, Oyedele took to his official X handle responding to some frequently ask questions on Nigeria’s new tax reform laws, including the capital gains tax regime which becomes effective from January 1, 2026.
He noted that the CGT rate has not been increased to 30 percent, rather CGT has been integrated into personal and corporate income tax.
“This means the tax you pay on capital gains depends on your overall income level or company profits, making the system more progressive. Effectively, the applicable CGT rate under the new laws ranges from 0percent to 30percent,” Oyedele said.
CGT is a tax charged on the profit made from the sale of a chargeable asset, such as shares, real estate, or other investments.
Currently, CGT in Nigeria is charged at a flat rate of 10 percent on all chargeable assets, regardless of the taxpayer’s income level.
“The reform makes CGT progressive so that low-income earners either pay no CGT or pay less, while higher-income earners contribute a fairer share. It also helps reduce distortions where income could previously be misclassified as capital to enjoy a lower, flat CGT rate,” he added.
Read also: Inside Nigeria’s new Tax Reform Law: Relief, risks, and realities
Under the new system, which takes effect from January 1, 2026, CGT will now be a progressive tax, tied to a taxpayer’s income tax rate. The applicable rate will range from 0percent– 30percent, depending on total income or profit.
Individuals who earn N800,000 or less annually will be exempt from tax on their income and gains.
Just recently, foreign investors emerged from a virtual investor call with Oyedele, with more concerns than reassurance, a development that could rattle sentiment toward the country’s equity markets.
The event, hosted by Standard Chartered, was intended to shed light on Nigeria’s newly minted capital gains tax regime. But feedback from participants suggests the exercise instead amplified doubts over the policy’s coherence, fairness, and long-term investor appeal.
In the notes below, Oyedele provides context to the reform and clarifies the issues that are frequently raised. The key takeaway from his answers is that the reforms make capital gains tax fairer, protect small investors, align Nigeria with global best practice, and provide wider tax reliefs that benefit businesses more than the limited CGT collections.
For analysts at Pavestones Legal, Nigeria’s capital gains tax reform represents a shift towards a more modern and integrated tax framework that seeks to retain capital locally and reinforce the domestic market, but predictable foreign exchange (FX) policies, regulatory efficiency, and ease of repatriation remain critical for sustaining investor confidence.
They noted that globally, jurisdictions such as Mauritius, Singapore, and the United Arab Emirates have built reputations as investor friendly hubs by maintaining transparent, predictable, and business-friendly tax systems. “These environments offer clarity, reduce uncertainty, and provide incentives that make capital deployment more efficient”, Pavestones Legal’s duo of Seun Timi-Koleolu and Omodele Fatodu noted recently.
“We strongly recommend that Government should reconsider its stance on Capital Gains Tax on as it affects capital market transactions,” said Sam Onukwue, a Fellow of Chartered Institute of Stockbrokers (CIS) recently said.
In what seems to be measures designed to deepen the domestic capital market and encourage reinvestment rather than capital flight, the new tax regime also provided key reliefs. For instance, individuals whose annual proceeds from asset sales do not exceed N150 million, where the gains are under N10 million, will be exempt.
For institutional investors like pension funds and other institutional investors, they remain exempt as well, preserving the depth and stability of the long-term investment capital in the market. Also, there’s reinvestment relief for investors who reinvest proceeds from the sale of shares into Nigerian companies. Gains made from these sales will not be subject to CGT. For companies undergoing reorganisation, mergers, or restructurings they will be exempted from CGT on those transactions.
Read also: How remote workers, diasporans, others will be taxed – Oyedele
Here’re Oyedele’s answers to other frequently asked questions…
???? ?? ??????? ????? ??? (???)?
CGT is a tax charged on the profit (or “gain”) made from the disposal of certain assets such as shares and real estate. Only the gain, not the total proceeds, is subject to tax. A flat rate of 10percent applies to all chargeable gains under the current laws.
??? ???? ??? ??? ??? ??????? ??????????
-CGT only applies to net gains, since capital losses can be offset against capital gains.
-Proceeds from sales not exceeding N150 million annually where the gains are not more than N10 million, are exempt. This means about 99 percent of individual investors are effectively exempt.
-Where the proceeds exceed the exemption threshold, CGT is not due if such proceeds are reinvested into the shares of a Nigerian company.
-Institutional investors such as pension funds are exempt from CGT, just as they are from corporate income tax.
-Companies undergoing reorganisations, mergers, or restructurings are not subject to CGT on those transactions.
?? ???? ?????? ????? ?? ???????? ?????????? ????????
No. CGT revenue is historically very small, less than 2 percent of what is collected from Companies Income Tax (CIT) and Value Added Tax (VAT). The reforms are about harmonisation, fairness and efficiency. In fact, businesses will benefit far more from reduced CIT rates and broader VAT input credits. For instance, the FIRS collected only N52 billion from CGT in 2024 compared to over N15 trillion from CIT and VAT. The reduced CIT rate and broader VAT credit is estimated to benefit businesses in the region of N4.5 trillion.
???? ????? ??????? ??????????
Most foreign investors can claim tax credits in their home country for taxes paid in Nigeria, under double taxation agreements or unilateral tax relief. This means CGT paid in Nigeria will often not be an additional cost.
???? ????? ??????? ???? ??????? ???? ?????????? ??? ???????????
No. The new rules are consistent with international best practice. Many countries already apply progressive tax treatment to capital gains, and exemptions for small investors and reinvestment make Nigeria’s regime competitive. When considered holistically, the lower CIT rate and broader input VAT credit in the new tax laws will improve profitability of companies, equity valuations, and enhance overall investor returns.
???? ??? ??? ?????? ????? ???? ?? ??? ??????? ???????
No. The CGT reform applies to all chargeable assets, unless specifically exempt. Examples of exemptions in addition to the threshold for shares include:
-Individuals selling up to two personal vehicles per year.
-The sale of an owner-occupied residential property.
?? ??? ??????? ??????? ????????? ??? ???????? ???? ??????
Not directly. Inflation and currency risks affect all investments and cannot be eliminated through tax laws. Investors are expected to manage these risks as part of their broader investment strategies.
???? ?? ????? ??????? ???? ???????
The changes will come into effect from January 1, 2026. Details regarding application to existing investments, historical cost, and compliance requirements will be covered under implementation guidelines with inputs from stakeholders.
