The Federal Government has introduced a new Capital Gains Tax (CGT) regime on shares, aimed at reducing business risks, boosting investor confidence, and aligning Nigeria’s tax environment with global best practices. Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, disclosed this during a virtual market engagement with the Nigerian Exchange Group (NGX) on capital gains taxation. According to Oyedele, the new framework is designed to ease compliance for businesses and individuals, while also protecting the country’s tax base.
“Under the previous regime, capital gains on shares were taxed at a flat rate of 10 percent, with no relief for losses and limited exemptions. The revised framework introduces progressive taxation where gains are taxed based on the payer’s income band—similar to systems in the U.S., U.K., South Africa, Ghana, and Brazil,” he said.
Key features of the reform include: Taxation on net gains-and-losses, with reinvestment relief retained. Exemptions for small companies and individuals with proceeds up to ₦150 million or gains not exceeding ₦10 million. Relief for reorganisations, alongside the continuation of low withholding tax on dividends.
Oyedele added that beyond CGT, the Federal Government is considering broader tax reforms to make Nigeria more attractive for investment. These include: Reduction of Companies Income Tax (CIT) from 30% to 25%. Harmonisation of multiple taxes from over 60 to fewer than 10. Elimination of minimum tax on turnover. Raising the threshold for CGT exemptions on shares. Introducing exemptions for Real Estate Investment Trusts (REITs) and securities lending. Allowing VAT credits on assets to cut investment costs. Personal income tax exemptions or final withholding tax on fixed-income securities.
“These reforms are not only about tax collection,” Oyedele said. “They are about levelling the playing field, reducing business risks, and positioning the Nigerian capital market as a real driver of economic growth.”
NGX Chairman, Dr. Umaru Kwairanga, welcomed the development, noting that the capital gains segment is critical for both individual and institutional investors. He described the engagement as timely, given the government’s ongoing tax overhaul, and pledged to continue incorporating stakeholder feedback into the reform process.
Industry experts say the revised CGT regime, if effectively implemented, could strengthen market liquidity, stimulate new listings, and encourage long-term investment, particularly from foreign portfolio investors seeking clarity and fairness in Nigeria’s tax system.
