Oyedele Clarifies 30% Capital Gains Tax Policy, Warns Against Evasion

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, has explained that the recently introduced 30% Capital Gains Tax (CGT) will improve Nigeria’s business valuation and deliver long-term benefits to the economy.

Speaking during the 31st Nigerian Economic Summit held in Abuja, Oyedele noted that the reform aligns Nigeria’s tax system with global best practices while encouraging reinvestment into the local economy.

He revealed that, effective January 2026, Nigeria will triple capital gains tax for foreign equity investors selling Nigerian shares — unless the profits are reinvested into other local or listed equities.

Small Businesses and Low-Income Earners Exempted

Addressing widespread concerns about the potential burden on small enterprises and individual investors, Oyedele clarified that micro and small businesses, as well as low-income earners, will not be affected by the 30% CGT rate.

“We have harmonized the capital gains tax with the regular income tax rate. If a small business pays zero percent corporate tax, its capital gains tax is also zero. Similarly, anyone exempted from PAYE will not pay capital gains tax,” Oyedele stated.

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He further explained that investors selling shares worth up to ₦150 million per year will be completely exempt from the tax. This threshold, he said, protects over 99% of investors from any new financial burden.

Economic Reforms to Boost Business Valuation

According to Oyedele, the revised capital gains tax policy is designed to improve corporate valuation, profitability, and cash flow, all of which are crucial to attracting long-term investors and sustaining Nigeria’s economic growth.

“The valuation of any business is based on the present value of its future cash flows. These reforms will enhance the intrinsic worth of every Nigerian company. The resulting increase in business value will far outweigh any additional tax cost,” he added.

He stressed that the reform would encourage investment retention, discourage speculative trading, and ensure sustainable development within the capital market.

Tackling Tax Evasion Through Digital Monitoring

Oyedele also issued a stern warning to tax evaders, noting that the Federal Government has strengthened its digital monitoring and third-party validation systems to detect underreporting or concealment of income.

“It is now very difficult to hide your spending, even if you hide your income. If you earn income, you must pay tax. The era of tax evasion through loopholes is coming to an end,” he said.

He confirmed that the new fiscal framework promotes fairness by protecting vulnerable groups and nano businesses — including petty traders, artisans, and small-scale service providers — through the use of official tax exemption stickers.

Outdated Taxes to Be Abolished

Oyedele also disclosed that the committee has submitted 10 amendment proposals to the National Assembly aimed at eliminating obsolete and redundant taxes.

Among the taxes proposed for removal are the bicycle tax, wheelbarrow levy, and radio license fee, which he described as outdated and inconsistent with Nigeria’s modern fiscal reality.

“We need to simplify our tax system. Nigerians should not have to deal with multiple irrelevant taxes that yield little or no revenue,” he emphasized.

Strengthening State Finances

The committee chairman also expressed optimism about the recent rise in Federation Account Allocation Committee (FAAC) revenues, saying it will help stabilize the finances of state governments and reduce the risk of bankruptcy at the subnational level.

Oyedele assured that the federal government remains committed to implementing tax reforms that will promote transparency, reduce wastage, and enhance the ease of doing business in Nigeria.

Key Takeaways from the New Tax Reforms

• 30% Capital Gains Tax now applies to foreign investors unless proceeds are reinvested locally.
• Small businesses and low-income earners remain exempt.
• Investors selling shares worth up to ₦150 million annually pay zero CGT.
• Digital monitoring systems will detect evasion and ensure compliance.
• Outdated taxes like bicycle and radio levies to be scrapped.
• Higher business valuations and improved investor confidence expected.