Nigeria’s upper legislative chamber, the Senate, on Wednesday urged the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, to urgently review the new 30 percent Capital Gains Tax (CGT) on large share sales, following a N2 trillion market loss recorded in the Nigerian Stock Exchange (NGX) last week.
The newly enacted CGT, contained in the recently passed Nigerian Tax Act 2025, raised CGT on share disposals worth N150 million and above from 10 percent to 30 percent, with implementation scheduled to begin in January 2026.
Experts believe that concerns about huge losses that investors will suffer when the implementation kicks off are currently making them to sell their shares in the equities market with the attendant negative implications for its capitalization during trading on stocks in the past few days
The Chairman of the Senate Committee on Capital Market and Institutions, Sen. Osita Izunaso, made the appeal to the fiscal authorities while presenting a paper titled “Redefining the Rules: The Investment and Securities Act 2025 and the Future of Nigeria’s Capital Market” at the Moneyline with Nancy Investment Forum 2025 held in Abuja.
- Advertisement -
According to him, the sudden adjustment in the tax regime has unsettled investors, resulting in a wave of massive share disposals that depreciated that NGX value by over N2 trillion within a week.
The Senator, who commended President Bola Tinubu for improving investor confidence in the nation’s capital market since 2023, linked the market’s boom to reforms that had stabilized the macroeconomic environment and improved policy coherence.
Izunaso expatiated: “However, there is something worrisome in the recent development under the Nigerian Tax Act 2025. The increase in Capital Gains Tax on share sales above N150 million is worrisome. This has created understandable concern among investors. In anticipation of this change, we have observed significant disposals by major investors, resulting in a notable decline in market capitalization over the past few days.
“While taxation is essential for revenue generation, it is equally critical that fiscal measures do not inadvertently undermine investors’ confidence or discourage long-term capital formation.
“The Senate Committee on Capital Market will be engaging the Honourable Minister of Finance to suggest to the minister to explore a mechanism to address this concern, ensuring that both domestic and foreign investors remain engaged and confident in the Nigerian market
“We are aware that the new law is supposed to commence by January 2026. But we are suggesting that there are some provisions of that Act that require the commencement to begin only when the Honourable Minister of Finance advises the Executive. I think this is one of those things that should not commence on January 1, because it is already affecting the market”, he added.
Meanwhile, Oyedele has clarified that the CGT framework will not retroactively tax investment gains made before 2026, while Edun assured that the government would adopt a cautious approach, including consultations, in implementing the recently enacted tax reform laws, particularly the contentious CGT on securities transactions
