By Musa Ibrahim
Investor confidence is set to rise as Nigeria unveils a progressive framework for Capital Gains Tax (CGT), making the capital market more attractive and fairer for everyone.
The reform was announced by Mr. Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, who insists the new CGT rules will lower risks, protect small and institutional investors, and create a more equitable system.
Mr. Oyedele explains, “This reform makes investment in the Nigerian capital market more attractive, reduces investment risk, and ensures fair treatment of legitimate costs incurred by investors.” The key aim, he says, is to promote “equity and confidence in the market – not the reverse.”
Core to the update, Nigeria’s flat 10 percent CGT is being replaced with progressive income tax rates ranging from 0 to 30 percent, depending on the investor’s income or profit. The highest rate, intended for big corporates, is expected to drop to 25 percent in the next phase of corporate tax reform. Mr. Oyedele assures that investors can now deduct previously disallowed costs, especially capital losses and other share-related charges, ensuring “they are not taxed on a net loss position.”
The reform seeks to level the playing field. For smaller investors, the benefits are clear. Exemptions include transactions with total sales proceeds under N150 million and gains below N10 million in 12 months. Retail investors, PFAs, REITs, and NGOs already exempt from income tax are also protected. Reinvested proceeds into Nigerian company shares and foreign share disposals channeled through the CBN are shielded from CGT as well.
Mr. Oyedele spells out, “Small companies with turnover not exceeding N100 million and total fixed assets not more than N250 million will pay zero percent CGT. Gains from investments in labelled startups by venture capitalists, private equity funds, accelerators, or incubators qualify for exemption.”
Importantly, to ensure fairness, the cost base for existing investments as of January 1, 2026, will reset to the higher of the actual acquisition cost or the closing market price on December 31, 2025. That way, “the new rule will not apply to gains accrued before the new law takes effect,” Mr. Oyedele explains.
Allowable deductions are now wider, covering realised capital losses, brokerage fees, regulatory levies, margin interest, and genuine FX losses. On compliance, resident investors must obtain a Tax Identification Number, but non-residents with only passive income are exempt. The default for tax filing is self-assessment, with possibilities for withholding at source by brokers.
All taxes are payable in Naira, with filing deadlines set for individuals by March 31 and companies within six months of the fiscal year-end. Investors are expected to pay in line with their state or via the Nigeria Revenue Service. Non-residents pay either directly upon disposal or through agents.
Clarity extends to company mergers or reorganisations, which are exempt, and gains earned up to December 31, 2025, which are grandfathered for future tax calculation. Oyedele encourages diligent documentation of acquisitions and sales for transparency and audit.
Crucially, Mr. Oyedele stresses, “the intent of this reform is not revenue-driven but aimed at harmonisation, promoting fairness, competitiveness, long-term interest, and investor confidence.” The new CGT model places Nigeria on a path more closely aligned with global standards, favouring reinvestment, low risk, and fair tax outcomes – while letting those who make sizeable exits contribute their fair share.
