Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, has stated that the new Capital Gains Tax (CGT) will make Nigeria’s capital market more competitive and investor-friendly. He spoke at a virtual lecture organized by the Capital Market Academics of Nigeria (CMAN).

Oyedele noted that, despite some negative perceptions, the CGT is low compared to Companies Income Tax (CIT) and Value Added Tax (VAT). Between 2014 and 2024, CGT collections were N276 billion, far lower than CIT (N26 trillion) and VAT (N22 trillion).

He highlighted that the recent CIT reduction from 30% to 25% would increase company profitability, offsetting the incremental CGT. The tax reform also allows input VAT credits on assets and overheads, lowering business costs and improving cash flows.

Key features of the policy include:

• Exemptions for retail investors, pensions, REITs, stock lending, and corporate reorganizations
• Deduction of capital losses and incidental costs
• Elimination of Withholding Tax (WHT) on bonus shares
• Stamp duty exemption on stock and share transfers
• Harmonization of various levies such as TET, NITDA, and NASENI
• Moderation of excessive fees by government agencies

Dr Umaru Kwairanga, Chairman of the Nigerian Exchange Group (NGX), emphasized that CGT is not new and that managing public perception is critical, as market sentiment can shift before actual policy changes take effect.

Innocent Ohagwu, President of the Chartered Institute of Taxation of Nigeria (CITN), affirmed that the CGT would benefit rather than harm the capital market, urging stakeholders to let the policy operate before criticism.

Economist Prof. Sheriffdeen Tella raised concerns about CGT on private bonds, warning it might push investors toward government bonds. Former FIRS Chairman Muhammad Nami called for more stakeholder engagement and suggested translating policy details into local languages to improve public understanding.