FG Clarifies New Capital Gains Tax Rules
Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has provided clarity on the newly approved Capital Gains Tax (CGT) framework, set to take effect from January 1, 2026. The reform, which has sparked debates among investors and market watchers, aims to make Nigeria’s tax system fairer, more efficient, and aligned with international best practices.
Oyedele explained that contrary to public perception, the CGT rate has not been increased from 10% to 30%. Instead, the tax has been integrated into personal and corporate income tax structures, meaning that the applicable rate will now depend on an individual or company’s overall income level, ranging progressively from 0% to 30%.
He stressed that the new structure protects small investors, as individuals whose annual sales proceeds do not exceed ₦150 million or whose capital gains are less than ₦10 million will be fully exempt from CGT. “About 99% of individual investors are effectively exempt,” Oyedele stated, adding that proceeds reinvested into shares of Nigerian companies will also be excluded from CGT obligations.
Institutional investors such as pension funds and companies undergoing mergers or restructurings will continue to enjoy full exemptions. Oyedele further clarified that the reform was not designed to raise government revenue, as CGT contributes less than 2% of total tax collections. In 2024, the Federal Inland Revenue Service (FIRS) collected ₦52 billion from CGT, compared to over ₦15 trillion from Companies Income Tax (CIT) and Value Added Tax (VAT).
“The real benefits of this reform lie in harmonisation, fairness, and reduced distortions,” he said. “Businesses will gain far more from lower CIT rates and expanded VAT input credits — savings estimated at over ₦4.5 trillion.”
On the question of Nigeria’s global competitiveness, Oyedele maintained that the changes would enhance rather than hinder investor confidence. He noted that the progressive structure mirrors systems used in advanced economies, while exemptions and reinvestment incentives keep Nigeria’s regime attractive.
He added that foreign investors would not face double taxation since many could claim tax credits in their home countries under existing bilateral agreements.
The reform, which applies to all chargeable assets beyond shares, including certain real estate and personal assets, excludes owner-occupied residential property and up to two personal vehicle sales per year.
Oyedele concluded that the changes would “create a fairer and more transparent tax be environment, protect small investors, and ultimately strengthen Nigeria’s capital market.”