The new CGT regime is structured to reduce business risks, strengthen investor confidence, and support a fairer, more competitive tax system.
Under the prior regime, capital gains on shares were taxed at a flat rate of 10%, with no relief for capital losses and limited exemptions.
The reform introduces progressive taxation for gains, taxing them based on the taxpayer’s income band (similar to systems in the U.S., U.K., South Africa, Ghana, and Brazil).
The regime also allows gains to be offset by losses (i.e. net gains basis), and retains reinvestment relief to encourage continued investment.
Exemptions will apply to small companies and individuals (proceeds up to ₦150 million or gains not exceeding ₦10 million), and corporate reorganizations will still enjoy reorganization exemptions.
Dividends will still attract a low withholding tax.
Additional reforms in the broader tax agenda:
• Reducing Companies Income Tax (CIT) from 30% to 25%
• Harmonising multiple taxes (from over 60 to fewer than 10)
• Eliminating minimum tax on turnover
• Raising the CGT exemption threshold on shares
The reforms aim to align Nigeria’s tax system with global best practices, attract long-term capital, and make the capital market a core engine of growth.
He also mentioned potential future adjustments: exemptions for Real Estate Investment Trusts (REITs), allowing VAT credits on assets, and final withholding tax on fixed income securities.
Not everyone is convinced. The CEO of 11PLC, Otunba Adetunji Oyebanji, had warned that the jump in CGT from 10% to 30% may discourage large-scale investment in Nigeria.
One of Oyebanji’s concerns is that the new reporting requirements might disproportionately burden small and medium enterprises (SMEs) that lack strong technological capacity.
The reform is part of the broader Nigeria Tax Act (NTA) and associated tax legislation passed in 2025.
The narrative from Oyedele is intended to position the new CGT as a catalyst for confidence, not deterrence. Whether it will succeed depends on how well the government implements the reforms and balances competing interests. Below are some potential risks, opportunities, and conditions to watch:
Opportunities and Positive Signals
Greater fairness & equity: Moving from a flat rate to a progressive structure may help ensure that taxpayers with larger gains contribute more, and those with smaller gains are protected.
Encouragement of longer holding periods and reinvestment is the reinvestment relief and ability to net gains and losses can incentivize more disciplined investment behavior rather than short-term trading.
Alignment with global norms we could improve Nigeria’s attractiveness to institutional and foreign investors, who often prefer markets with tax regimes consistent with international standards.
Wide tax reform package is the CGT change is only one piece; if the broader reforms (CIT reduction, tax harmonisation, eliminating minimum tax) are effectively implemented, they may collectively tip the balance in favor of investment.
Perception & confidence may even if the reforms are well-intended, investors may see the 30% CGT rate (for companies) as punitive, especially if exemptions or reliefs are not easily accessed or clearly defined.
Implementation & administration is the success of such reforms hinges on the capacity, transparency, and fairness of enforcement (e.g. FIRS performance, clarity of regulations, appeals, etc.).
SME burden: Small and medium businesses may face increased compliance costs and technical demands. If not addressed, this could stifle the SME sector.
Unintended capital flight or tax avoidance some actors may try to relocate or structure their transactions to avoid higher CGT, which could reduce the expected revenue gains.
Time-lag effect is the confidence and investment responses may take time. Investors may adopt a wait-and-see posture initially.
Clarity and transparency in regulations (detailed guidelines, clear processes, timelines).
Transitional measures (e.g. grandfathering, phased implementation) to ease the shift for existing investors.
Effective stakeholder engagement (businesses, capital markets, SMEs) to ensure the reforms are realistic.
Strong tax administration (capacity, digital systems, fair audits).
Monitoring and willingness to adjust (if certain provisions prove counterproductive).
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