The new changes in the tax reform is forcing investors to rethink how they build and protect wealth.
With changes to Capital Gains Tax (CGT), adjustments to Personal Income Tax (PIT) thresholds, and broader fiscal reforms designed to boost government liquidity, wealth managers say the investment environment has become more complex and more sensitive to policy signals.
“The CGT changes are one of the reasons for the recent dip in the market,” said Omoniyi Animashaun, a private wealth manager, noting that conversations with clients have become more urgent in recent weeks.
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Under the revised structure, profits from selling equities, crypto assets, or other investments will now be taxed according to progressive PIT bands, a significant shift from the flat 10 percent rate investors were used to. Joyce Sanusi, a tax adviser, said the reforms are pushing investors toward more tax-efficient instruments.
“Clients need to evaluate their existing tax positions and make adjustments with the rate. It’s also important to make use of allowances such as rent relief to optimise post-tax returns.” A Nigerian-based tax expert advised
Animashaun added that the search for better after-tax performance is already influencing portfolio strategy. “We’ll start seeing people focus more on investments like government securities, mutual funds, or structured products that help them achieve better post-tax returns.”
For Animashaun, the policy shift is reshaping investor behaviour in real time. While the intent of the reforms is to “ensure liquidity and stability in the economy,” he said many investors are reacting emotionally.
“The major concern for most investors is the CGT rates. People are panic-selling, and it’s discouraging investment,” he explained. “This wave of sell-offs has contributed to recent market dips as investors move quickly to lock in gains before the new rules take full effect.”
Data from the Nigerian Exchange (NGX) supports this sentiment. The All-Share Index year-to-date index closed at 39.2 percent on 24 November, representing a 1.06 percent decline from 17 November. Though the market remains significantly higher on a year-to-date basis, trading activity has slowed as investors reassess their positions ahead of the new tax regime.
Despite the volatility, Animashaun said the pullback has opened opportunities. “It creates chances for new clients to buy stocks while prices are down. This will help them earn higher returns when the market rebounds.”
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As policies shift, wealth managers are becoming more involved in helping clients interpret and respond to new rules, not just manage assets.
“We first understand each client’s objectives, consider their risk appetite, then provide guidance based on that,” Animashaun said. He maintains that long-term fundamentals remain intact despite near-term market pressure. “The equity space has always outperformed. We encourage clients to invest in equities and mutual funds.”
Beyond short-term market swings, some analysts believe the reforms could strengthen transparency across the broader investment ecosystem. Animashaun described the new PIT framework as “progressive and clear,” noting that income-based exemptions make compliance less ambiguous.
“Individuals earning N10 million and below are exempt, and corporates earning N150 million and below are exempt,” he said. “Aside from exemptions, there’s no avoidance; there’s no two ways about it.”
The tax expert echoed the need for structured planning.
“Investors should take advantage of all allowances and deductions, such as rent relief, to reduce their taxable income,” he said. “Proper planning now will avoid surprises when the rates are fully implemented.”
Animashaun believes that as compliance frameworks become clearer, markets will react more rationally. “The market reacts to changes as it should,” he noted. “But I hope in the coming years, it will be more open and transparent.”
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For wealth managers, navigating this tax transition requires balancing policy awareness with long-term investment discipline. While new tax rules may unsettle investors in the short term, they insist that those who remain focused and properly advised stand to benefit once uncertainty fades.
“Clients need to reevaluate their existing tax positions and make adjustments with the rate, and make use of allowances such as the rent relief,” the tax expert said. “Proper documentation is key. Tax consultants can guide clients to review their portfolios and align them with the new tax rates.”