Nigeria’s capital market is in turmoil following recent issues over the upcoming 25% Capital Beneficial properties Tax (CGT) on share disposals set to take impact in January 2026.
The anxiousness stems from new clarifications made by Taiwo Oyedele, Chairman of the Presidential Fiscal Coverage and Tax Reforms Committee, throughout an engagement organized by the Nigerian Trade Group (NGX) final month.
Oyedele defined that underneath the brand new rule, traders who promote shares and reinvest the proceeds in fixed-income securities or different non-equity belongings can be topic to a 25% CGT.
He, nevertheless, famous that retail traders will largely be unaffected, because the N150 million annual exemption threshold successfully shields 99.9% of particular person gamers.
“Solely only a few large traders cross that threshold, largely institutional gamers or high-net-worth people,” Oyedele mentioned.
Regardless of the exemption, capital market operators warn that the brand new tax might disrupt investor sentiment, particularly amongst overseas portfolio traders who’ve not too long ago proven renewed curiosity in Nigerian equities.
One market operator, who spoke on situation of anonymity, described the coverage as “poorly conceived,” warning that its ambiguities, retroactive computation, and steep price might deter capital inflows and lift the price of fairness at a essential time when Nigeria is simply starting to get better investor confidence.
The skilled added that with clearer guidelines, average charges, and cost-basis changes, the tax might nonetheless be carried out in a manner that helps slightly than undermines market progress.
Beneath the present design, capital features are calculated based mostly on historic price, not adjusted for inflation or forex depreciation.
“Which means traders might be taxed on features made years earlier than the regulation even existed,” one analyst defined.
This strategy, they warn, might result in double taxation and inflated liabilities, particularly in an inflationary setting the place the naira’s depreciation distorts actual features.
Echoing related sentiments, Otunba Adetunji Oyebanji, CEO of 11 Plc, described the brand new regime, which additionally raises company CGT to 30% as doubtlessly punitive for companies.
He famous that the mix of upper charges and stricter reporting guidelines might impose heavy burdens on smaller enterprises whereas discouraging large-scale investments.
In 2023, whereas the proposal was nonetheless being debated, Sam Onukwue, Chairman of the Affiliation of Securities Dealing Homes of Nigeria (ASHON), advised Nairametrics that the reintroduction of CGT risked stifling the market.
Sarcastically, Taiwo Oyedele, now one of many tax’s chief defenders, as soon as shared related reservations.
In a 2022 presentation at an RCCG occasion, he warned that the ten% CGT launched underneath the Finance Act might discourage capital market funding, particularly given the concurrent expiration of tax exemptions on company bonds.
The timing of the controversy is delicate, with the All-Share Index up 38% year-to-date as of September 2025. This extends a five-year streak of annual features, the longest because the 2000–2008 growth cycle.
Analysts worry that sudden coverage shifts such because the CGT rule might reverse these features, triggering capital flight and eroding confidence simply as Nigeria seeks to draw long-term overseas funding.
Whereas the Federal Authorities goals to broaden its tax base and curb speculative capital motion, market stakeholders warn that poor design and abrupt implementation might ship the other impact.
They opine that it could actually scale back liquidity, discouraging participation, and undermining Nigeria’s fame as a reform-driven funding vacation spot.
As one analyst summed it up:
