Analysts have suggested that the newly introduced Capital Gains Tax (CGT), which is expected to take effect from January 1, 2026, will negatively impact investments and the macroeconomic stability of the country.
They said they do not think the policy is a good idea, especially with implications on venture capital investment, real estate and other key investments.
They also said that this has led many of the portfolio investors to consider selling their assets before the end of the year at the existing 10% rate.
This is coming at a time when the NGX was in red as panic-driven sell-offs wiped out roughly N1.8 trillion in market value within just four trading sessions.
President Bola Ahmed Tinubu had in June 2025 signed accented to the new tax laws, introducing sweeping reforms through the Nigeria Tax Act, 2025.
One of the most controversial changes in the new tax system is the increase in the Capital Gains Tax (CGT) rate from 10% to as high as 30%, a policy that has generated a lot of reactions and takes effect from January 1, 2026.
For corporate organizations, the CGT rate increased from a flat 10% to 30%, aligning it with the standard Companies Income Tax (CIT) rate, while for individuals, the capital gains will be taxed according to their personal income tax (PIT) progressive tax bands, with rates ranging from 0% to 25%.
Naijaonpoint understands the CGT will be reduced to 25% when it becomes operational in January 2026.
The CGT is imposed on chargeable gains arising from the sale of assets such as equities, all forms of properties, digital assets and others.
Business leaders and capital market operators have raised significant concerns over the new CGT regime introduced under the Nigeria Tax Act of 2025. Some of their concerns include deterrence to investment, panic sell-offs, and competitiveness with other developing economies, among others.
However, in its clarification, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, said the 25% CGT will only be charged on sales of shares where the proceeds are reinvested in fixed income securities or other non-equity assets.
Oyedele, however, noted that retail investors will largely not be affected, as the exemption threshold of N150 million annually puts 99.9% of retail investors outside the scope.
Speaking to Naijaonpoint in an exclusive interview, the Founder/Chief Executive Officer (CEO) of the Centre for The Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said he feels that the primary focus of the Federal Government with the CGT is more on revenue rather than investment as they feel that people are making so much money from the capital market.
He said that even if the government had to introduce an increase in Capital Gains Tax, the 30% is on the high side.
On whether it was a good idea for the government to come up with such an increase at this critical time, Dr Yusuf said, “I don’t think so. I feel that from an investment point of view, and given the role that the portfolio flows also play in stabilising our macroeconomic environment, at least at this time, I don’t think it is such a great idea.
‘’And of course, implications also for other key investment venture capital investment and even real estate and the rest of them. So, from an investment point of view it’s not such a great idea and in this stage of our recovery we need to be conscious of the need to ensure that we do not anything that will impede investment, because what is happening in this particular case, I think the focus is more on revenue and that’s how it is coming across to me. People are making so much money from the capital market. Even if you have to increase, 30% is on the high side.”
‘’And of course, implications also for other key investment venture capital investment and even real estate and the rest of them. So, from an investment point of view it’s not such a great idea and in this stage of our recovery we need to be conscious of the need to ensure that we do not anything that will impede investment, because what is happening in this particular case, I think the focus is more on revenue and that’s how it is coming across to me. People are making so much money from the capital market. Even if you have to increase, 30% is on the high side.”
Yusuf had, in an earlier statement, said that the 200% increase in CGT is excessive by any standard, could destabilize sectors that rely heavily on capital gains and undermine Nigeria’s competitiveness in attracting and retaining both domestic as well as foreign investors.
However, an Investment Banking Analyst with CardinalStone Partners. Oluwaseun Adeniji suggested a mixed outcome with the policy.
Adeniji said the CGT policy will likely create a short-term sell pressure with capital erosion and a decline in equity market participation, a major concern for investors.
He, however, noted that over the medium term, the reform could improve fiscal transparency and possibly balance the government’s revenue goals.
He also pointed out that many of the investors are considering selling their assets before the end of the year at the existing 10%
He said, ‘’As Nigeria’s revised capital gains tax (CGT) regime takes effect in January 2026, investors are reassessing their portfolios to mitigate potential tax exposure. The rescheduling of the CGT has led many to consider selling assets before year-end at the existing 10% rate and repurchasing in the new year to reset their cost base.
‘’While this strategy may create short-term sell-side pressure, the major concern for investors remains the risk of capital erosion and a decline in equity market participation, as after-tax returns could become less attractive.
‘’Over the medium term, the reform could improve fiscal transparency provided policy consistency, clear valuation rules, and efficient implementation are ensured. If well managed, the CGT reform could balance the government’s revenue goals with sustaining investor confidence in Nigeria’s capital markets.’’
Naijaonpoint had earlier reported that foreign investors at a virtual call organized by Standard Chartered bank expressed their frustration and disappointment with Taiwo Oyedele led committee’s new CGT provision.
The call, which attracted several foreign investors seeking clarity on how the provisions would affect equity investments in Nigeria, left many participants questioning both the economic philosophy and investor sensitivity guiding the reforms.
Several investors described Oyedele’s tone as “surprisingly ideological,” suggesting that the country’s top tax reformer appeared more “socialist” than market-oriented.
However, Oyedele, in his response, stated that participants who gave feedback after the virtual call to clarify the contentious new Capital Gains Tax (CGT) provisions in Nigeria’s tax reform law rated the engagement nearly 90%.
He explained that exempting the poor while fairly taxing the wealthy is not socialism but rather progressive taxation.
The tax and fiscal policy chief rejected the idea that his remarks on CGT would send troubling signals about Nigeria’s competitiveness and predictability, insisting that most advanced capital markets across the world still remain attractive to investors even after applying CGT.