Nigeria Eases CGT Rules for Share Investors
Atume Terfa
Nigeria’s capital market is buzzing with renewed optimism as investors welcome sweeping tax reforms that grant full relief on gains from share sales — a move analysts say could transform trading behaviour and restore liquidity to the stock market.
Under the revamped Nigeria Tax Act 2025 (NTA), any profit from selling shares — whether earned before December 31, 2025 or realised afterwards — will no longer be subject to Capital Gains Tax so long as the proceeds are reinvested in shares of Nigerian companies within 12 months. For many investors, it’s the most significant incentive the market has seen in years.
To further calm nerves and protect long-held equity positions, the reform resets the cost basis for existing shares. When the new regime takes effect, past gains are shielded by adopting the higher of the original purchase cost or the market value as of December 31, 2025. In simple terms, investors are assured that historical gains won’t suddenly become taxable under the new law.
But the reforms go even deeper. Starting January 1, 2026, Nigeria’s CGT structure will shift from a one-size-fits-all 10% rate to a progressive system linked to total income, ranging from 0% to 30% — a change designed to make the tax framework fairer and more aligned with global standards.
Small and mid-scale investors also gain an added layer of protection. Share disposals below ₦150 million or gains under ₦10 million fall entirely outside CGT obligations. Institutional players such as pension funds, REITs, and approved securities-lending operations remain exempt, safeguarding large pools of long-term capital.
According to Taiwo Oyedele, head of the Presidential Tax Reform Committee, the reforms aim to restore investor confidence, reduce friction in the capital market, and encourage long-term wealth creation rather than speculative exits. Market analysts agree, noting that the relief encourages investors to rebalance portfolios, exit loss-making positions, and reinvest without fear of tax erosion.
For many in the market, the message is clear: reinvesting pays — not just in tax savings, but in renewed opportunities across Nigeria’s growing equities landscape.
