The Presidential Committee on Fiscal Policy and Tax Reforms says the new Capital Gains Tax (CGT) regime on shares is designed to reduce business risks, strengthen investor confidence, and create a fairer tax system.
The Chairman of the committee, Mr Taiwo Oyedele, disclosed this during a virtual market engagement with the Nigerian Exchange Group (NGX) on capital gains tax.
He explained that the reform seeks to lower entry costs for startups, improve cash flow for businesses, and protect the country’s tax base, while easing compliance for individuals and companies.
“Under the old regime, capital gains on shares were taxed at a flat rate of 10 per cent, with no relief for capital losses and limited exemptions.
“The new regime introduces progressive taxation, where gains are taxed based on the payer’s income band, similar to practices in the U.S., U.K., South Africa, Ghana, and Brazil,” Oyedele said.
He added that capital gains would now be taxed on a net gains-and-losses basis, with reinvestment relief retained.
Exemptions will also apply to small companies and individuals with proceeds of up to N150 million or gains not exceeding N10 million.
Other reliefs include reorganisation exemptions and the continuation of a low withholding tax on dividends.
Oyedele noted that beyond capital gains, the government is considering broader measures to make Nigeria’s tax environment more investment-friendly.
These include reducing Companies Income Tax (CIT) from 30 per cent to 25 per cent, harmonising multiple taxes from over 60 to less than 10, eliminating minimum tax on turnover, and raising the threshold for CGT exemptions on shares.
“We are also looking at exemptions for Real Estate Investment Trusts (REITs) and securities lending, allowing VAT credits on assets to reduce investment costs, and introducing personal income tax exemptions or final withholding tax on fixed income securities,” he said.
He stressed that the reforms were aimed at levelling the playing field, aligning Nigeria with global best practices, and positioning the capital market as a driver of economic growth.
In his remarks, NGX Chairman, Dr Umaru Kwairanga, said the session was timely, given the Federal Government’s ongoing overhaul of the tax system.
Kwairanga said the capital gains segment was critical to both individuals and institutions, making it imperative for stakeholders to fully grasp the changes introduced.
He expressed confidence that his leadership would continue to incorporate stakeholder inputs into the reform process.
