November 13, 2025/CSL Report
The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, has clarified that Nigeria’s new Capital Gains Tax (CGT) framework will not apply retroactively to past investment gains. This clarification, issued ahead of the full implementation of the reform under the proposed Nigeria Tax Act 2025, outlines key transitional provisions designed to protect investors from taxation on historical profits. The new CGT framework is scheduled to take effect on 01 January 2026.
At the heart of the clarification is a cost basis reset and a grandfathering clause, both aimed at ensuring fairness in the taxation of future capital gains. Under the new rule, investors who bought shares at a lower price in previous years and saw their value rise will not be taxed on those historical gains. Instead, taxation will only apply to any appreciation in value that occurs after 2025. In simple terms, the grandfathering provision ensures that investors who accumulated gains before 2026 will not be penalized for holding assets over time.
This clarification provides significant relief to investors who had feared that the reform might apply retroactively. In recent weeks, the Nigerian capital market had experienced heightened volatility, with the Nigerian Exchange All-Share Index (NGXASI) losing over ₦6.3 trillion in market value within just seven trading sessions, including a single-day loss of ₦4.7 trillion. Market participants largely attributed the selloffs to uncertainty surrounding the implementation of the new CGT framework. However, the assurance that the tax will apply only to future gains, together with comments from the Federal Minister of Finance
confirming that investors’ concerns would be addressed, has helped restore confidence, ease market jitters, and stem panic-driven disposals as reflected in the 2.89% NGX ASI jump recorded yesterday to close at 145,405.39 points.
Beyond the transitional provisions, the new CGT framework introduces broader reforms aimed at modernising Nigeria’s tax system. It replaces the current flat 10% rate with a progressive structure ranging from 0% to 30%, depending on income levels. Institutional investors including pension funds, Real Estate Investment Trusts (REITs), and registered non-profit organisations will continue to enjoy exemptions. Investors will also be permitted to deduct legitimate expenses such as losses, brokerage fees, and interest on margin loans when calculating taxable gains.
In addition, a reinvestment relief clause allows investors who reinvest their proceeds in Nigerian equities within 12 months to be exempt from CGT. With the clarification, a significant rebound in the equities market is anticipated till year-end, with the All-Share Index likely to record strong gains in the coming days as investors return to buying positions. Ultimately, the assurance that the new tax regime is fair, forward-looking, and non-retroactive should help reverse the recent steep losses on the Nigerian Exchange and restore stability and investor trust in the market.
Click here to download full report: CSL Nigeria Daily – 13 November 2025 – Equities..pdf
