Nigeria’s plan to raise its capital gains tax (CGT) from 10% to 25% starting January 2026 has drawn mixed reactions from investors, with concerns that the new regime could dampen capital inflows and complicate large transactions.
The increase, contained in the Tax Reform Act signed in October 2025, marks a sharp departure from the country’s longstanding 10% rate, which had made Nigeria one of Africa’s most competitive low-tax jurisdictions for investors.
Under the new structure, the 25% rate will apply only to net capital gains exceeding N150 million, and investors will be allowed to offset losses against gains.
In addition, CGT will not apply if the proceeds from equities are reinvested in equities within the same year, provided the reinvestment is in shares of a Nigerian company. The current flat 10% regime, by contrast, taxes gross profits without any deductions.
According to the Presidential Committee on Fiscal Policy and Tax Reforms, chaired by Taiwo Oyedele, the new design aligns Nigeria’s CGT with its corporate income tax rate and introduces fairness into the system by ensuring that only genuine profits are taxed.
Still, analysts warn that the steep jump could reduce the country’s investment appeal, especially for large-scale transactions such as mergers, private-equity exits, and real-estate disposals.
“Even if small investors are exempted, the perception matters,” a Lagos-based investment banker told Naijaonpoint. “A 25% rate puts Nigeria closer to the high-tax bracket, and that can influence how foreign funds assess exits.”
For years, Nigeria’s 10% CGT mirrored Rwanda’s flat rate, a model often praised for simplicity and transparency.
Both countries stood out for offering clear and predictable frameworks that supported long-term capital formation. That advantage may now fade as Nigeria joins a growing list of African economies tightening their fiscal regimes.
In Ghana, authorities have also revised their CGT structure. According to a reminder published by the Ghana Revenue Authority (GRA) and data compiled by PwC’s 2025
Worldwide Tax Summaries gains on asset disposals may now be taxed at the standard corporate income rate of 25%, up from the previous 15% applied in limited cases.
The change aligns CGT with Ghana’s corporate tax rate as part of its fiscal-consolidation drive.
Across the continent, CGT rates vary widely. Rwanda maintains its 10% rate; Kenya charges 15%; Morocco applies 20%; and South Africa imposes an effective 21.6% on corporate gains and 18% on individuals.
At the upper end, Uganda taxes personal capital gains at 40%, while Namibia and Zambia currently have no defined CGT rate.
Analysts say the diversity reflects a continent balancing fiscal ambition with competitiveness. Lower rates attract investment but reduce revenue, while higher rates boost collections at the risk of discouraging capital flows.
For Nigeria, the 25% CGT represents a shift toward fiscal boldness. Supporters argue it could reduce speculative trading and encourage longer-term investment horizons.
For Nigeria, the 25% CGT represents a shift toward fiscal boldness. Supporters argue it could reduce speculative trading and encourage longer-term investment horizons.
But sceptics believe the timing could hurt market confidence, especially amid high inflation, tight liquidity, and weak foreign participation in the equities market, as earlier highlighted in a Naijaonpoint report on international investors’ frustration with the policy.
Still, fiscal experts insist the reform could ultimately strengthen Nigeria’s credibility if implemented predictably. By taxing only net gains and excluding most retail investors, the government believes it has struck a fair balance between competitiveness and equity.
Nigeria’s new regime, like Ghana’s recent adjustment, highlights a regional trend toward harmonising capital taxation with broader income-tax structures.
Whether that approach drives revenue growth or curbs investor appetite will become clearer when the policy takes effect in 2026.