…Likely review of CIT to 25% upon NEC approval
Taiwo Oyedele, chairman of the Presidential Committee on Fiscal Policy and Tax Reforms in Nigeria, has said that the Capital Gains Tax (CGT) will be reviewed from 30 percent to at least 25 percent come 2026.
“There’s a plan to reduce that to 25 percent, which means eventually it will be taxed at 25% for the exit. And this rule applies to everyone. So there is no distinction between your foreign investor or your local investor,” Oyedele said at an event themed ‘Tax matters Unplugged’ with Stanbic IBTC today.
Under the Nigeria Tax Act of 2025, Capital Gains Tax (CGT) has been raised to 30 percent from 10 percent, effective January 1, 2026.
Capital Gains Tax (CGT) is a tax charged on profits (gains) realised from the disposal or sale of shares or other equity instruments. Under the new regime, CGT ensures that investors who profit from rising share prices contribute to public revenue.
Wale Edun, Minister of Finance and the coordinating minister of the economy, had also mentioned earlier this month plans to review the controversial Capital Gains Tax (CGT) ahead of its implementation next January.
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This was as a result of the backdrop of cautious trading in the equities market, as investors recalibrate portfolios in response to geopolitical tensions arising from the US–Nigeria diplomatic standoff, and the proposed Capital Gains Tax (CGT).
Analysts say the reform makes record-keeping, timing of sales, and strategic planning more critical than ever. “People will try to invest across asset classes so they can spread whatever taxes they have to pay or diversify across real estate and other classes.” Mustapha, CSL Stockbrokers.
Oyedele also mentioned that the corporate tax rate, which is currently 30%, and the plan is that by 2026, it will come down to 25 percent.
“ We had written the CIT review for 25 percent into the law, but the governors refused it, so we found a way to add it to the law with a condition to get approval of the governors under the National Economic Council (NEC),”
“ We have written to NEC, and are hoping we can put all of this behind us by the time we finalise the tax law before the end of December, or by early 2026, before people have to start paying this tax,” Oyedele said.
He said this means that companies that are listed will become more profitable, even the unlisted ones as well.
Another very important reform that was introduced in the new tax act is the treatment of VAT input. Nigeria so many years since VAT was introduced, businesses were unable to claim input VAT credit on their assets, essentially capital investment, and they were unable to claim input VAT as well on services and overhead, so that just meant a pile up of cost for businesses, whereas under the new reform, they will get full input credit for for VAT on assets as well as on overhead and service.
The chairman said that the combined impact of the lower corporate income tax rate and the input credit for VAT alone is in the region of N5.4 trillion. If you convert that to dollars, that’s somewhere in the region of $3.5 billion, and this is almost 60 to 70 percent of the size of corporate tax revenue.
“So this is essentially a stimulant for businesses from next year that is expected to, on one hand, conserve their cash flow,” Oyedele