The Nigerian government is set to implement reforms to the Capital Gains Tax (CGT) in a bid to increase revenue, but over 99% of investors in the country’s capital market have portfolios valued below 150 million, resulting in limited revenue from CGT. According to Taiwo Oyedele, Chairman of the Presidential Committee on Tax Policy and Fiscal Reforms, the proposed reforms have been misconstrued, leading to unnecessary panic among investors.
Speaking on a television program, Oyedele clarified that the reforms aim to improve transparency without burdening small investors. He explained that more than 99% of investors on the Nigerian Exchange (NGX) have portfolios below 150 million and will be completely exempted from capital gains tax starting January 2026. This exemption will apply to the majority of investors in the capital market, providing them with relief from the tax.
Investors with portfolios exceeding 150 million who reinvest their proceeds in Nigerian stocks will also enjoy permanent exemptions on all gains made. Oyedele noted that all gains realized before December 31, 2025, will remain unaffected, and the reform aims to attract more participation in the Nigerian capital market while protecting low and middle-income investors.
The CGT reforms have been designed to address the issue of low revenue generation from the tax, which is currently at 10%. The proposed reforms will see the rate increase to 30% for certain investors, but Oyedele emphasized that this will not apply to the majority of investors. Instead, the reforms will provide exemptions for small investors and those who reinvest their proceeds in the Nigerian stock market.
The Nigerian government is seeking to improve the country’s tax system and increase revenue generation. The CGT reforms are part of a broader effort to strengthen the economy and attract more investment. By providing exemptions for small investors and those who reinvest in the Nigerian stock market, the government aims to promote economic growth and development.
The implementation of the CGT reforms is set to take effect in January 2026, and investors are advised to seek professional advice to understand how the changes will affect their portfolios. The Nigerian government has assured that the reforms will be implemented in a way that protects the interests of low and middle-income investors, while also generating much-needed revenue for the country.