Economy
New Capital Gains Tax Will Attract More Investors, Boost Confidence—Oyedele
By Adedapo Adesanya
Nigeria’s new Capital Gains Tax (CGT) framework will make investing in the capital market more attractive by reducing risks, promoting fairness, and simplifying compliance, according to the chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele.
Mr Oyedele said the reform, which takes effect from January 1, 2026, represents one of the most significant improvements to Nigeria’s tax system in recent years.
He noted that contrary to misinformation circulating in some quarters, the new CGT rules are designed to protect small investors, encourage reinvestment, and align with international best practices, rather than impose additional burdens on the market.
The reform “reduces investment risks, protects small investors, encourages reinvestment, and ensures that high-income earners contribute their fair share without discouraging market participation,” he said in an explainer posted on X, formerly known as Twitter.
Under the new rules, the flat 10 per cent CGT rate has been replaced by progressive income tax rates ranging from zero to 30 per cent, depending on an investor’s overall income or profit level while large corporate investors will see the top rate reduced to 25 per cent as part of a wider corporate tax reform.
The tax titan also noted that the framework aallows investors to deduct legitimate costs such as brokerage fees, regulatory charges, realised capital losses, margin interest, and foreign exchange losses directly tied to investments, thereby ensuring that they are not taxed when operating at a loss.
Mr Oyedele said the reforms introduced a more inclusive approach to taxation by exempting several categories of investors and transactions.
Retail investors and tax-exempt institutions such as Pension Funds Administrators (PFAs), Real Estate Investment Trusts (REITs), and NGOs will not be subject to CGT. Similarly, small companies with annual turnover below N100 million and assets under N250 million will pay zero percent CGT.
Further, gains from investments in labelled startups made by venture capitalists, private equity firms, accelerators, or incubators will also be exempt.
For individuals and firms whose proceeds exceed the N150 million threshold within 12 months, the law provides relief through reinvestment. If the proceeds are reinvested into shares of Nigerian companies within a year, such transactions will enjoy full exemption from CGT.
Additionally, gains from the disposal of foreign shares repatriated through Central Bank of Nigeria (CBN) channels will not attract the tax.
In a move to ensure fairness, the cost base for calculating gains will be reset to the higher of the actual acquisition cost or the market value as of December 31, 2025. This prevents retrospective taxation on gains that accrued before the law’s commencement.
Resident investors are required to register for tax identification numbers and pay applicable taxes to their state of residence or the Nigeria Revenue Service (NRS), depending on whether they are individuals or corporate entities.
However, non-resident investors who earn only passive income such as dividends or capital gains will not need to obtain a Tax ID.
He also clarified that the government may also introduce withholding mechanisms through brokers or exchanges to simplify compliance and collection.
Business Post reports that tax filing deadlines remain straightforward: individuals must file by March 31 of the following year, while companies have six months after their financial year-end to do so. Non-resident investors will pay upon disposal of shares, unless they choose to reinvest within the same year.
Mr Oyedele emphasized that the reform is not a revenue-raising measure but a strategic policy move to improve fairness, competitiveness, and long-term investor confidence in Nigeria’s financial markets, adding that gains realised before the end of 2025 would be “grandfathered,” meaning they will only be taxed under the existing law when disposed of, preserving investor rights during the transition period.
He further clarified that corporate reorganisations such as mergers, acquisitions, or internal restructurings are exempt from CGT, and investors are expected to maintain proper records of acquisitions, disposals, and related costs for audit purposes.
By Dipo Olowookere
The second trading session of the week on the Nigerian Exchange (NGX) Limited ended on a positive note with a further 0.46 per cent surge on Tuesday.
The strong appetite for Nigerian stocks helped the market capitalisation of Customs Street to grow by N468 billion to N102.275 trillion from N101.807 trillion and the All-Share Index (ASI) soared by 732.86 points to 159,951.08 points from the previous day’s 159,218.22 points.
Yesterday, 65 equities ended on the gainers’ chart and 21 equities finished on the losers’ table, indicating a positive market breadth index and bullish investor sentiment.
Meyer expanded by 10.00 per cent to N14.30, Jaiz Bank appreciated by 10.00 per cent to N5.28, ABC Transport increased by 9.98 per cent to N4.96, and Austin Laz gained 9.94 per cent to close at N5.64.
Conversely, Aluminium Extrusion lost 9.96 per cent to settle at N21.70, Learn Africa decreased by 9.16 per cent to N5.95, Oando shrank by 7.69 per cent to N40.80, UBA weakened by 6.22 per cent to N43.00, and Access Holdings crashed by 6.00 per cent to N23.50.
Business Post reports that Linkage Assurance led the activity chart after it transacted 51.6 million shares worth N93.1 million, Sterling Holdings traded 49.2 million stocks valued at N368.5 million, Access Holdings sold 48.7 million equities for N1.2 billion, Mutual Benefits exchanged 34.7 million shares valued at N142.0 million, and Regency Alliance transacted 26.4 million stocks worth N33.6 million.
At the close of trades, market participants bought and sold 759.0 million equities for N19.9 billion in 54,212 deals during the session versus the 695.7 million equities worth N18.6 billion in 56,632 deals on Monday.
This showed that the volume of transactions and the value of trades went up by 9.10 per cent, and 6.99 per cent, respectively, while the number of deals went down by 4.27 per cent.
By Adedapo Adesanya
The Naira recorded a N10.24 or 0.72 per cent gain on the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Tuesday, January 6, to close at N1,419.07/$1 compared with the previous day’s N1,429.31/$1, extending the stellar start to the year.
The local currency also improved its value against the Pound Sterling in the same market window yesterday by N2.98 to trade at N1,917.20/£1 versus N1,920.27/£1 and gained N7.12 on the Euro to end at N1,660.31/€1 compared with Monday’s closing price of N1,667.43/€1.
At the GTBank forex counter, the domestic currency appreciated against the greenback on Tuesday by N3 to finish at N1,435/$1 versus the previous value of N1,438/$1 and at the parallel market, it maintained stability on the Dollar at N1,470/$1.
The Naira gains come amid ease in demand seen in the softer market activity at the start of the year, alongside reduced participation from offshore investors.
FX inflows into the NFEM window declined by 20.67 per cent week on week to $593.70 million from $748.40 million in the previous week, according to a weekly report by Coronation Merchant Bank.
Market analysts expect that the Central Bank of Nigeria (CBN) will maintain its strategic interventions in the FX market and implement initiatives aimed at boosting liquidity and curbing speculative activities.
Meanwhile, the CBN’s gross external reserves edged up by 0.58 per cent, rising by $264.56 million at the start of the year to $45.50 billion, and increasing further to $45.56 billion as of January 2, 2025.
A look at the digital currency market showed that it was in red, triggered by renewed selling pressure with market analysts saying the digital currencies are starting the year in recalibration mode rather than retreat.
After earlier gains. Ripple (XRP) slumped by 5.2 per cent to $2.25, Cardano (ADA) declined by 2.9 per cent to $0.4111, Dogecoin (DOGE) shrank by 2.6 per cent to $0.1479, Bitcoin (BTC) slid by 1.4 per cent to $93,625.47, Litecoin (LTC) went down by 1.0 per cent to $82.90, and Solana (SOL) lost 0.4 per cent to sell $138.76.
On the flip side, Binance Coin (BNB) appreciated by 0.7 per cent to $914.53, and Ethereum (ETH) improved by 0.3 per cent to $3,248.36, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Adedapo Adesanya
Oil was down on Tuesday as the market weighed expectations of ample global supply this year against uncertainty around Venezuelan crude output after the US capture of President Nicolas Maduro.
Brent crude futures declined by 69 cents or 1.1 per cent to $61.07 a barrel and the US West Texas Intermediate (WTI) crude tumbled by 79 cents or 1.4 per cent to $57.53 a barrel.
Oil supply will be sufficient in 2026, with or without an increase in production from Venezuela, which is a member of the Organisation of the Petroleum Exporting Countries (OPEC).
US President Donald Trump wants the big American oil firms to return to Venezuela and invest in rebuilding the oil infrastructure in the country holding the world’s biggest proven oil reserves, estimated at about 303 billion barrels.
Venezuela, a founding member of OPEC, has more oil reserves than each of its fellow OPEC members and top exporters in the Gulf, including Saudi Arabia, Iraq, the United Arab Emirates (UAE), and Iran.
With Maduro out, US oil giants are set to invest billions of US Dollars to fix the oil infrastructure and start making money for Venezuela, according to President Trump.
Venezuela’s oil sector has long been in decline, due in part to underinvestment and US sanctions. Oil production from the country averaged 1.1 million barrels per day last year. Exxon, ConocoPhilips, and Chevron are some of the names that could make return to the South American country.
Morgan Stanley analysts said in a note on Tuesday that global oil demand likely grew by around 900,000 barrels per day last year, compared to a historical trend rate of 1.2 million barrels per day.
OPEC supply grew 1.6 million barrels per day and non-OPEC supply grew about 2.4 million barrels per day between the fourth quarters of 2024 and 2025, the Morgan Stanley analysts said.
The bank said oil markets could be in a surplus of as much as 3 million barrels per day in the first half of 2026.
Saudi Arabia has cut the price of its flagship crude grade Arab Light loading for Asia in February, in the third consecutive monthly reduction amid ample supply and weakened Middle Eastern benchmarks.
Saudi Arabia’s decision to cut the prices of all its crude grades follows this weekend’s short OPEC+ meeting, at which the eight producers implementing the cuts reaffirmed they would keep oil production steady through the first quarter of 2026.
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