Capital Gains Tax, set to start January 1, 2026, has prompted investors to reassess portfolios urgently.
Under the Nigeria Tax Act, the government introduced sweeping reforms, causing investors to reconsider holdings before year-end.
Consequently, many plan to sell assets at the current 10% rate to avoid higher taxes.
Capital Gains Tax
The government increased corporate CGT rates from 10% to 30%, aligning them with the Companies Income Tax system.
For individuals, authorities will tax gains progressively between 0% and 25%, depending on income bands.
Moreover, sources indicate that the effective CGT will reach 25% when fully implemented in January 2026.
The tax targets equities, property, digital assets, and other high-value investment vehicles, affecting many sectors.
Market Impact
Business leaders warn that higher taxes could reduce investment and shake market confidence.
Therefore, investors face a tight timeline to reset their cost bases before the new law.
“Short-term sell pressure will emerge, but reforms may improve fiscal transparency over time,” said Adeniji.
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For example, the Nigeria Exchange (NGX) lost about ₦1.8 trillion in just four trading sessions.
These panic-driven sell-offs reflect concern for venture capital, real estate, and other critical sectors.
Dr Muda Yusuf argued that the government focuses more on revenue than on supporting investment growth.
He added, “Even if a hike was necessary, 30% is too high and may discourage capital inflows.”
Retail investors remain mostly unaffected due to the ₦150 million annual exemption threshold.
Furthermore, Taiwo Oyedele explained that the tax targets high-value gains, especially reinvestments in non-equity assets.
Thus, investors now weigh short-term tactics against long-term consequences for Nigeria’s capital market.
Ultimately, portfolio adjustments continue, as the market balances reform goals with sustaining investor confidence.
