Olufemi Adeyemi 

Nigeria’s capital market received a boost of clarity on Monday as stakeholders were assured that retail investors will be shielded from most of the impact of the new Capital Gains Tax (CGT) regime set to take effect in January 2026.

Under the provisions of the Tax Reform Act 2024, investors in the market will benefit from an annual exemption of up to N150 million, effectively protecting 99.9 per cent of retail investors from the 30 per cent tax imposed on gains from the disposal of shares.

The clarification was given by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, during a high-level dialogue convened by the Nigerian Exchange Group (NGX) in Lagos. The forum brought together a cross-section of issuers, investors, intermediaries, and regulators to discuss the implications of the sweeping tax changes.

Oyedele explained that while the standard CGT rate on share disposals has been fixed at 30 per cent, investors who reinvest proceeds into fixed-income or non-equity instruments will be charged a reduced rate of 25 per cent. More importantly, reinvestments into Nigerian companies—whether listed or unlisted—will be fully exempt, a deliberate move to channel capital flows into the domestic economy.

“This is about balancing revenue needs with competitiveness,” Oyedele noted. “The exemption threshold ensures ordinary investors are not discouraged, while incentives for reinvestment encourage capital to remain within Nigeria’s productive sectors.”

Group Managing Director and Chief Executive Officer of Nigerian Exchange Group, Temi Popoola
Temi Popoola, GMD/Chief Executive Officer of NGX Group, said the dialogue was crucial in providing clarity to stakeholders ahead of implementation. According to him, “Reforms of this scale raise important questions for the market. Our priority is to keep the capital market attractive and forward-looking while supporting long-term growth.”

NGX Group Chairman, Umaru Kwairanga, emphasised the Exchange’s role as a trusted convener of stakeholders. He stressed that engaging regulators and investors on critical reforms is essential to preserve market confidence and competitiveness, particularly as Nigeria positions itself against other African economies.

“At NGX Group, we believe that significant policy shifts must be clearly understood and calibrated to preserve market confidence. Our core function is to facilitate this essential engagement between policymakers and the market to ensure reforms translate into sustainable, long-term economic growth,” Kwairanga said.

The session also addressed technical issues such as determining the base cost of investments, prospective application of the law from its commencement date, and the treatment of cross-listed securities to avoid double taxation.

Participants described the engagement as timely, noting that investor confidence would be strengthened if reforms are implemented with transparency and market realities in mind. Analysts added that by shielding most retail investors while incentivising reinvestment into local businesses, the reforms could deepen market participation and support Nigeria’s broader economic objectives.