The Federal Government has assured Nigerian investors that the vast majority of participants in the stock market will not be affected by the proposed capital gains tax (CGT). Speaking at a stakeholders’ engagement in Lagos, Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, explained that more than 99% of investors, including retail traders, are permanently exempt from CGT under the new framework.
Oyedele clarified that investors who sell shares worth up to N150 million in any 12-month period, with capital gains not exceeding N10 million, are automatically exempt. “All investors are tax-exempt in the capital markets. Ninety-nine per cent of them, the exemption is unconditional,” he emphasized. Institutional investors, including pension funds, mutual funds, and REITs, are also fully exempt.
For the small fraction of investors outside these categories, Oyedele said the law allows an option to reinvest proceeds from share sales to avoid CGT entirely. This measure is designed to maintain market liquidity, without imposing restrictive holding-period requirements that often discourage trading and reduce market depth.
The committee chairman also addressed concerns that CGT fears triggered recent stock market volatility. Citing market data, he noted that the average transaction size during the November sell-off was far below the exemption threshold, making panic over CGT largely unfounded. He added that Nigeria’s stock market had recorded about 45% year-to-date gains prior to the CGT controversy.
Beyond capital gains tax, the reforms introduce multiple incentives to strengthen the stock market, including exemptions on bonus shares, stamp duties, and withholding taxes, as well as a reduction in companies’ income tax from 30% to 25%. Oyedele urged media and stakeholders to report accurately, warning that misinformation could undermine investor confidence and harm ordinary market participants.
source: The Sun