Capital Gain Tax in Nigeria has undergone a significant transformation with the enactment of the Nigeria Tax Act (NTA) 2025, which came into effect on January 1, 2026. Consequently, this comprehensive reform consolidates and repeals several tax laws, including the Capital Gains Tax Act (CGTA), Companies Income Tax Act (CITA), and Personal Income Tax Act (PITA), among others.

For investors engaged in stock disposal and reinvestment activities, understanding the changes in capital gains tax (CGT) treatment is crucial for effective tax planning and compliance. Therefore, this article examines the key differences between the Finance Act 2021 regime and the new NTA 2025, with particular focus on disposal of shares, reinvestment provisions, and applicable thresholds.

Overview of Capital Gains Tax on Stock Disposal

Scope of Chargeable Assets Under NTA 2025

The Act significantly broadens the definition of chargeable assets. Specifically, according to the statute, “all forms of property shall be chargeable assets for the purpose of this Part, whether situated in Nigeria or not,” including:

• Any form of asset: Shares, options, rights, debts
• Digital or virtual assets: Cryptocurrencies, NFTs, and other digital properties
• Incorporeal property generally: Intangible assets
• Foreign currency: Any currency other than Nigerian Naira
• Self-created property: Property created by the person disposing of it or acquired without cost

Critical Point: This applies “whether situated in Nigeria or not,” meaning Nigerian tax residents are subject to CGT on worldwide asset disposals, subject to applicable tax treaties.

Capital Allowances Impact: Furthermore, the Act specifically states this section applies “notwithstanding that the property is an asset in respect of which qualifying capital expenditure had been incurred.” This means even if you claimed capital allowances (depreciation) on an asset, it remains a chargeable asset for CGT purposes.

What is Capital Gains Tax?

Capital Gains Tax is a levy imposed on gains arising from the disposal of chargeable assets. For the purposes of this discussion, we focus on gains from the disposal of shares in Nigerian companies, which became subject to CGT following the Finance Act 2021’s amendment of Section 30 of the Capital Gains Tax Act.

Why the Change Matters

Prior to Finance Act 2021, gains from disposal of shares were largely exempt from CGT, making Nigeria an attractive destination for portfolio and direct investments. However, the introduction of CGT on share disposals marked a significant policy shift aimed at broadening the tax base and increasing government revenue.

The Finance Act 2021 Regime

Key Provisions

The Finance Act 2021, signed into law in January 2022, introduced capital gains tax on the disposal of shares with the following framework:

1. Tax Rate

• Corporate entities: 10% on chargeable gains
• Individuals: 10% on chargeable gains

2. Threshold for Taxation

Capital gains tax applied where the aggregate proceeds from share disposal exceeded ₦100 million within any 12 consecutive months. Notably, this measurement period was not necessarily aligned with the company’s accounting period or the calendar year, providing flexibility but requiring careful tracking of disposal dates.

3. Reinvestment Relief

Moreover, the Finance Act 2021 provided a proportionate waiver from CGT where proceeds from disposal were reinvested within the same year of assessment (YOA). Specifically, the relief operated as follows:

• If the entire proceeds were reinvested in acquiring shares in the same or another Nigerian company within the same YOA, no CGT was payable
• Alternatively, if only part of the proceeds were reinvested, CGT was charged only on the portion not reinvested
• Importantly, the reinvestment must be in shares of Nigerian companies
• Additionally, the reinvestment must occur within the same year of assessment as the disposal

4. Other Exemptions

• Gains from disposal of Nigerian government securities were not chargeable
• Similarly, transfers in approved regulated securities lending transactions were exempt

Practical Example under Finance Act 2021

Scenario: ABC Limited disposed of shares in Companies X and Y for a total of ₦200 million in March 2022, realizing a chargeable gain of ₦50 million. In April 2022 (same year of assessment), ABC Limited reinvested the entire ₦200 million proceeds in acquiring shares in Company Z.

Tax Treatment: ABC Limited would not be liable to CGT on the ₦50 million gain, having reinvested the entire proceeds within the same assessment year.

Alternative Scenario: If ABC Limited had only reinvested ₦150 million out of the ₦200 million proceeds:

• Proceeds reinvested: ₦150 million (75%)
• Proceeds not reinvested: ₦50 million (25%)
• Chargeable gain subject to CGT: ₦50 million × 25% = ₦12.5 million
• CGT payable: ₦12.5 million × 10% = ₦1.25 million

The Nigeria Tax Act 2025: A New Era

Fundamental Changes

In contrast to the previous regime, the NTA 2025 represents a comprehensive overhaul of Nigeria’s tax system, with significant implications for capital gains taxation:

1. Dramatically Increased Tax Rates

For Corporate Entities:

• CGT rate increased from 10% to 30% (or the applicable Companies Income Tax rate)
• Consequently, this aligns CGT with CIT, eliminating the previous tax arbitrage between capital gains and trading income
• Special consideration: Companies in the upstream petroleum sector operating under the Petroleum Profits Tax Act (PPTA) regime could face CGT rates as high as 85%, matching their profit tax rate

For Individuals:

• In contrast, CGT is now taxed at progressive personal income tax rates (up to 25%) instead of the flat 10% rate
• Specifically, the applicable rate depends on the individual’s total taxable income band:
  • ₦0 – ₦800,000: 0% (exempt)
  • ₦800,001 – ₦3,200,000: 5%
  • ₦3,200,001 – ₦6,400,000: 10%
  • ₦6,400,001 – ₦12,800,000: 15%
  • ₦12,800,001 – ₦25,600,000: 20%
  • Above ₦25,600,000: 25%

2. Enhanced Threshold Requirements

The NTA 2025 establishes a dual threshold test for exemption on disposal of shares in Nigerian companies:

Both conditions must be met for exemption:

• Disposal proceeds, in aggregate, must be less than ₦150 million (increased from ₦100 million), AND
• Chargeable gains must not exceed ₦10 million
• Both thresholds are measured within any 12 consecutive months (not necessarily aligned with calendar year or accounting period)

This dual requirement means that even if proceeds are below ₦150 million, if the gain exceeds ₦10 million, CGT will apply. Conversely, if proceeds equal or exceed ₦150 million, CGT applies regardless of the gain amount (unless reinvestment relief applies).

3. Reinvestment Relief: The Game Changer

This is perhaps the most powerful provision in the NTA 2025 for tax planning. The Act provides:

Full Exemption Where:

• Proceeds from disposal are reinvested in acquiring shares in the same or other Nigerian companies
• Reinvestment occurs within the same year of assessment
• Critically: This relief applies “notwithstanding the threshold” – meaning even if your disposal proceeds are ₦500 million or ₦1 billion, if you reinvest the entire amount, you pay zero CGT

Key Statutory Language: The Act states that gains shall not be chargeable where “proceeds from such disposal, notwithstanding the threshold in (i), are reinvested within the same year of assessment in the acquisition of shares in the same or other Nigerian companies.”

Partial Reinvestment:

• Where only part of the proceeds are reinvested, “tax shall accrue proportionately on the portion of the proceeds which are not reinvested”
• The tax is calculated based on the proportion of proceeds (not gains) that are not reinvested
• This proportionate taxation applies to the chargeable gains attributable to the non-reinvested portion

4. Other Exemptions Under NTA 2025

Regulated Securities Lending Transactions: The Act provides a specific exemption for “shares transferred between an approved borrower and a lender in a regulated securities lending transaction.” This exemption:

• Facilitates capital market liquidity
• Allows institutional investors to engage in securities lending without CGT consequences
• Requires the transaction to be regulated (typically under SEC rules)
• Applies to both the transfer from lender to borrower and return transfer

Government Securities: Gains from disposal of Nigerian government securities remain exempt from CGT, consistent with the previous regime.

5. Computation of Chargeable Gains

The NTA 2025 introduces new rules for calculating chargeable gains:

If capital allowances were claimed:

• Chargeable gain = Sale proceeds – Tax written-down value

If capital allowances were not claimed:

• Chargeable gain = Sale proceeds – Historical cost

This change increases CGT liability for assets on which depreciation was claimed.

5. Indirect Transfer of Shares

A significant new provision taxes gains from indirect transfers of Nigerian assets:

• Where shares in offshore holding companies that derive value from Nigerian assets are disposed of, Nigerian CGT applies
• This captures transactions previously structured to avoid Nigerian tax
• Subject to applicable tax treaty protections

6. Small Company Exemption

Companies classified as “small companies” enjoy complete CGT exemption:

Criteria for Small Company Status:

• Annual gross turnover: ≤ ₦100 million (increased from ₦25 million)
• Total fixed assets: ≤ ₦250 million
• Excludes: Professional service firms

Small companies are exempt from:

• Companies Income Tax
• Capital Gains Tax
• Development Levy (4% on assessable profits)

Comparative Analysis: Finance Act 2021 vs. NTA 2025

Summary Table

Aspect	Finance Act 2021	Nigeria Tax Act 2025
Corporate CGT Rate	10%	30% (matches CIT rate)
Individual CGT Rate	10% (flat rate)	Progressive rates (0% – 25%)
Exemption Threshold	Single test: Proceeds < ₦100m (within 12 months)	Dual test: Proceeds < ₦150m AND Gains ≤ ₦10m (within 12 months)
Reinvestment Relief	Proportionate exemption if reinvested in Nigerian companies within same YOA	Enhanced: Full exemption “notwithstanding threshold” if fully reinvested within same YOA
Securities Lending	Not explicitly addressed in FA 2021 amendments	Explicit exemption for regulated securities lending transactions
Calculation Basis	Proportionate to proceeds not reinvested	Proportionate to proceeds not reinvested (codified in statute)
Measurement Period	Any 12 consecutive months	Any 12 consecutive months (maintained)
Indirect Transfers	Not covered	Now taxable (subject to treaties)
Small Company Exemption	Threshold: ₦25m turnover	Threshold: ₦100m turnover & ₦250m fixed assets
Gain Computation	Single method	Dual method based on capital allowance claims

Impact on Different Investor Categories

1. Large Institutional Investors

Impact: Most significantly affected

• 200% increase in CGT rate (from 10% to 30%)
• Higher after-tax cost of portfolio rebalancing
• May discourage frequent trading and reduce market liquidity

Mitigation Strategy: Maximize use of reinvestment relief by timing disposals and acquisitions within the same year of assessment

2. High-Net-Worth Individuals

Impact: Variable depending on total income

• Top earners: 150% increase (from 10% to 25%)
• Middle-income investors: May see 50-100% increase
• Low-income investors (< ₦800,000 annual income): Actually benefit from 0% rate

Mitigation Strategy: Income splitting with family members in lower tax brackets (subject to anti-avoidance rules)

3. Small and Medium Enterprises

Impact: Potentially beneficial

• Increased exemption threshold (₦100m turnover → includes more companies)
• Complete exemption from CGT if qualifying as small company
• Encourages retention and growth below threshold

Consideration: May create incentive to structure businesses to stay below threshold

4. Foreign Portfolio Investors

Impact: Significant deterrent

• Tripling of CGT rate reduces net returns
• New indirect transfer provisions close previous planning structures
• May redirect investment to other African markets

Treaty Considerations: Some relief may be available under Double Taxation Agreements

Strategic Tax Planning Considerations

1. Maximizing Reinvestment Relief – The Most Powerful Tool

The reinvestment relief provision is the cornerstone of CGT planning under NTA 2025. The statutory language “notwithstanding the threshold” means this relief is available regardless of transaction size.

Best Practices:

• Plan disposal and reinvestment within the same calendar year (year of assessment)
• Reinvest the entire proceeds to achieve zero CGT liability, even on billion-Naira transactions
• Ensure reinvestment is in shares of Nigerian companies (the Act specifically states “shares in the same or other Nigerian companies”)
• Document the reinvestment clearly with:
  • Share purchase agreements
  • Payment evidence
  • Share certificates or allotment letters
  • Timeline showing dates fall within same YOA
• Consider establishing a reinvestment vehicle or SPV to facilitate ongoing compliance

Critical Timing Consideration: “Year of assessment” for companies is typically their accounting year, while for individuals it’s the calendar year. Ensure you understand your applicable YOA before planning transactions.

Example Strategy: If you must dispose of shares worth ₦500 million (gain of ₦100 million), rather than paying ₦30 million in CGT (for corporates), reinvest the entire ₦500 million in shares of other Nigerian companies within the same year. Result: ₦0 CGT. You’ve effectively deferred the tax while maintaining equity exposure and can repeat this strategy in future years.

What Qualifies as Reinvestment:

• Must be in shares (not bonds, debentures, or debt instruments)
• Must be in Nigerian companies (not foreign companies, even if they operate in Nigeria)
• Can be in the same company or other Nigerian companies
• Can be across multiple companies (diversification allowed)
• Must be completed within the same year of assessment as the disposal

Definition of “Nigerian Company”: While the Act does not explicitly define this term in the CGT section, it generally refers to:

• Companies incorporated in Nigeria under the Companies and Allied Matters Act (CAMA)
• May include companies with significant business operations in Nigeria (subject to regulatory guidance)
• Caution: Foreign companies listed on the Nigerian Exchange (NGX) may not qualify – seek professional advice
• Safe harbor: Companies incorporated in Nigeria under CAMA are clearly qualifying

What Does NOT Qualify:

• Real estate purchases
• Nigerian government bonds or securities
• Corporate bonds or debentures
• Mutual fund units (unless the fund itself is structured as a company)
• Foreign company shares, even if listed on NGX
• Partnership interests
• Cash held in bank accounts

2. Timing of Disposals

Considerations:

• Assess whether disposal can be delayed until circumstances are more favorable
• For companies approaching small company thresholds, consider timing to maintain exemption status
• Year-end planning to ensure reinvestment occurs within same YOA

3. Utilizing Small Company Exemption

Strategies:

• Structure investments through qualifying small companies where possible
• Monitor turnover and fixed asset levels to maintain exemption status
• Consider impact of anti-avoidance provisions on artificial fragmentation

4. Loss Offset Planning

The NTA 2025 allows capital losses to be offset against capital gains:

• Losses can be carried forward for up to 5 years
• Maintain proper documentation of losses
• Plan disposals to utilize accumulated losses

5. Understanding the 12-Month Measurement Period

Both thresholds (₦150 million proceeds and ₦10 million gains) are measured over “any 12 consecutive months,” not the calendar year or accounting period. This creates both planning opportunities and compliance challenges:

Key Points:

• The 12-month window is rolling, not fixed to calendar or fiscal year
• You could have disposals in December 2025 (₦80m) and January 2026 (₦80m) that aggregate to ₦160m if measured within a 12-month window
• Aggregation is required: All disposal proceeds within any 12-month period must be totaled
• Tax authorities can look at any continuous 12-month period to assess threshold compliance

Record-Keeping Imperative:

• Maintain a disposal register tracking all share sales by date and amount
• Use rolling 12-month calculations to monitor threshold proximity
• Consider timing disposals to avoid clustering within 12-month windows if staying below threshold is the goal

Example:

• June 2025: Dispose shares for ₦90m (gain ₦8m)
• March 2026: Dispose shares for ₦65m (gain ₦4m)
• Analysis: From March 2025 to March 2026 (any 12 consecutive months), total proceeds = ₦155m, total gains = ₦12m
• Result: Both thresholds exceeded → Entire amount subject to CGT
• Solution: Either space disposals more than 12 months apart, or reinvest proceeds to utilize exemption

6. Restructuring Considerations

For holding companies and investment vehicles:

• Review offshore structures in light of indirect transfer provisions
• Consider treaty shopping opportunities (where legitimate)
• Assess benefits of redomiciling assets to Nigeria
• Evaluate impact on group structure and transfer pricing

Compliance and Filing Requirements

Key Obligations

1. Record Keeping 
   • Maintain detailed records of all share acquisitions and disposals
   • Document reinvestment transactions with dates, amounts, and parties
   • Preserve evidence of capital allowances claimed
   • Keep records for at least 6 years
2. Self-Assessment 
   • Compute CGT liability accurately
   • File returns within prescribed timelines
   • Pay assessed tax within 30 days of assessment
3. Withholding Obligations 
   • Stockbrokers and intermediaries may have withholding obligations
   • Ensure compliance with withholding tax requirements on share transfers
4. Transfer Pricing Documentation 
   • Related party transactions must comply with Transfer Pricing Regulations
   • Maintain contemporaneous transfer pricing documentation
   • Ensure arm’s length pricing on share transfers within groups

Practical Examples: Old vs. New Regime

Example 1: Corporate Investor – Partial Reinvestment

Facts:

• XYZ Limited disposes of shares for ₦200 million (proceeds)
• Acquisition cost: ₦120 million
• Chargeable gain: ₦80 million
• Reinvests ₦150 million in another Nigerian company
• Non-reinvested amount: ₦50 million

Finance Act 2021 Treatment:

• Proportion of proceeds not reinvested: ₦50m / ₦200m = 25%
• Chargeable gain subject to CGT: ₦80m × 25% = ₦20 million
• CGT payable: ₦20m × 10% = ₦2 million

NTA 2025 Treatment:

• Proportion of proceeds not reinvested: ₦50m / ₦200m = 25%
• Chargeable gain subject to CGT: ₦80m × 25% = ₦20 million
• CGT payable: ₦20m × 30% = ₦6 million

Impact: 200% increase in CGT liability (₦4 million additional tax)

Key Observation: The statutory provision states “tax shall accrue proportionately on the portion of the proceeds which are not reinvested.” This means the calculation is based on the proportion of total proceeds that are not reinvested, and that proportion is then applied to the chargeable gains.

Example 2: Individual Investor – Full Disposal Without Reinvestment

Facts:

• Mr. Ade disposes of shares for ₦180 million (proceeds)
• Acquisition cost: ₦100 million
• Chargeable gain: ₦80 million
• Does not reinvest
• Annual income (including gain): ₦100 million

Finance Act 2021 Treatment:

• Proceeds exceed ₦100 million threshold
• Chargeable gain: ₦80 million
• CGT payable: ₦80m × 10% = ₦8 million

NTA 2025 Treatment:

• Proceeds (₦180m) exceed ₦150 million threshold → Exemption does not apply
• Gain (₦80m) exceeds ₦10 million threshold → Exemption does not apply
• Dual threshold test failed → Fully taxable
• Total income: ₦100 million
• Applicable rate: 25% (highest bracket)
• CGT payable: ₦80m × 25% = ₦20 million

Impact: 150% increase in CGT liability (₦12 million additional tax)

Example 3: The Power of Reinvestment Relief – Large Transaction

Facts:

• Nigeria Investment Fund disposes of shares for ₦1 billion (proceeds)
• Acquisition cost: ₦600 million
• Chargeable gain: ₦400 million
• Reinvests the entire ₦1 billion in shares of other Nigerian companies within the same year of assessment

NTA 2025 Treatment:

• Proceeds (₦1 billion) vastly exceed ₦150 million threshold
• Gain (₦400 million) vastly exceeds ₦10 million threshold
• However: Entire proceeds reinvested in Nigerian company shares within same year of assessment
• Statutory provision: Relief applies “notwithstanding the threshold”
• CGT payable: ₦0

Alternative Scenario – Partial Reinvestment: If only ₦800 million was reinvested:

• Non-reinvested proceeds: ₦200m / ₦1,000m = 20%
• Chargeable gain subject to CGT: ₦400m × 20% = ₦80 million
• CGT payable: ₦80m × 30% = ₦24 million

Key Learning: The reinvestment relief is extremely powerful and can provide complete exemption regardless of transaction size, making it the single most important tax planning tool for share disposals under NTA 2025.

Example 4: Small Company Investor

Facts:

• ABC Ventures Limited (annual turnover: ₦80 million, fixed assets: ₦200 million)
• Disposes of shares for ₦120 million
• Chargeable gain: ₦40 million

Finance Act 2021 Treatment:

• Chargeable gain: ₦40 million (exceeds ₦100m threshold test passes but gain is taxable)
• CGT payable: ₦40m × 10% = ₦4 million

NTA 2025 Treatment:

• Qualifies as small company (turnover < ₦100m AND fixed assets < ₦250m)
• Fully exempt from CGT
• CGT payable: ₦0

Impact: Complete exemption represents 100% savings

Example 5: Edge Case – Dual Threshold Test

Facts:

• Mrs. Chinwe disposes of shares for ₦140 million (proceeds)
• Acquisition cost: ₦125 million
• Chargeable gain: ₦15 million
• Does not reinvest

Analysis:

• Proceeds test: ₦140m < ₦150m ✓ (Passes)
• Gain test: ₦15m > ₦10m ✗ (Fails)
• Result: Both conditions must be met for exemption. Since gain exceeds ₦10 million, the entire gain is chargeable to CGT despite proceeds being below threshold.

NTA 2025 Treatment:

• CGT payable (corporate): ₦15m × 30% = ₦4.5 million
• CGT payable (individual, top bracket): ₦15m × 25% = ₦3.75 million

Key Lesson: Taxpayers must satisfy BOTH thresholds simultaneously. Meeting only one threshold is insufficient for exemption.

Planning Point: If Mrs. Chinwe had reinvested the entire ₦140 million within the same year of assessment, her CGT liability would be ₦0, demonstrating again the power of reinvestment relief.

Industry-Specific Implications

1. Capital Markets and Asset Management

Challenges:

• Reduced liquidity due to higher transaction costs
• Portfolio managers face pressure on returns
• May discourage active trading strategies

Opportunities:

• Favor long-term investment strategies
• Emphasis on buy-and-hold approaches
• Development of tax-efficient investment products

2. Private Equity and Venture Capital

Challenges:

• Significantly higher exit costs (30% vs. 10%)
• Reduced IRR on investments
• May require renegotiation of fund economics

Mitigation:

• Structure exits through reinvestment vehicles
• Utilize 24-month angel investor exemption for qualifying startups
• Consider holding period optimization

3. Real Estate Investment Trusts (REITs)

Impact:

• Share disposals by REITs subject to new rates
• May affect REIT attractiveness relative to direct property investment

Planning:

• Review REIT structures for tax efficiency
• Consider distribution policies in light of new rules

4. Family Offices and High-Net-Worth Portfolios

Considerations:

• Estate planning now requires CGT analysis
• Generational wealth transfer strategies need revision
• Trust structures may require re-evaluation

Regional and International Perspectives

Comparison with Other African Jurisdictions

Country	CGT Rate (Corporate)	CGT Rate (Individual)	Exemption Threshold
Nigeria (NTA 2025)	30%	0-25% (progressive)	₦150m proceeds & ₦10m gains
South Africa	22.4%	18%	None (annual exclusion R40,000)
Kenya	15%	15%	None
Ghana	15%	15%	None
Egypt	22.5%	10%	Various exemptions

Observation: Nigeria’s 30% corporate rate is now among the highest in Africa, potentially affecting competitiveness for foreign investment.

Tax Treaty Considerations

Nigeria has Double Taxation Agreements with numerous countries. Key considerations:

• Indirect transfer pr
  

  Capital Gain Tax in Nigeria

  ovisions: May be subject to treaty limitations

• Residence test: Determine applicable jurisdiction based on treaty residence article
• Capital gains article: Review specific treaty provisions on taxation of gains from shares
• Limitation of benefits: Ensure substance requirements are met to claim treaty benefits

Looking Ahead: Expected Developments

1. Regulatory Guidance

The Federal Inland Revenue Service (now Nigeria Revenue Service) is expected to issue:

• Information circulars on CGT computation
• Guidelines on indirect transfer provisions
• Clarification on reinvestment relief mechanics
• Compliance and filing procedures

2. Potential Amendments

Areas likely to see further clarification or amendment:

• Definition and scope of “indirect transfers”
• Treatment of share-for-share exchanges in mergers
• Interaction with transfer pricing rules
• Small company anti-avoidance provisions

3. Enforcement Focus

Tax authorities are likely to focus on:

• Large institutional investors and pension funds
• Private equity exits
• Offshore holding structures
• Related party transactions

Recommendations for Taxpayers

Immediate Actions

1. Conduct Tax Health Check 
   • Review current investment portfolio
   • Assess potential CGT exposure under new rules
   • Identify opportunities for reinvestment relief
   • Evaluate small company exemption eligibility
2. Update Tax Planning Strategies 
   • Revise investment policies to account for higher CGT
   • Consider timing of planned disposals
   • Evaluate restructuring opportunities
   • Review holding structures
3. Enhance Record-Keeping 
   • Implement robust systems for tracking acquisitions and disposals
   • Document all reinvestment transactions
   • Maintain evidence supporting exemption claims
   • Keep contemporaneous records

Medium-Term Planning

1. Engage Professional Advisors 
   • Consult tax consultants for complex transactions
   • Obtain legal opinions on treaty application
   • Use audit firms for compliance reviews
2. Monitor Legislative Developments 
   • Stay informed on regulatory guidance
   • Track potential amendments
   • Participate in industry advocacy where appropriate
3. Consider Investment Strategy Adjustments 
   • Evaluate shift to tax-exempt instruments where appropriate
   • Consider impact on asset allocation decisions
   • Review international diversification strategies

Conclusion

The transition from Finance Act 2021 to the Nigeria Tax Act 2025 represents a fundamental shift in the capital gains tax landscape for stock disposal and reinvestment. The tripling of corporate CGT rates from 10% to 30%, introduction of progressive rates for individuals, enhanced thresholds, and new provisions on indirect transfers collectively create a more complex but potentially more equitable tax environment.

While these changes increase the tax cost of investment transactions, the enhanced reinvestment relief provisions and expanded small company exemptions provide meaningful planning opportunities. Successful navigation of this new terrain requires:

• Proactive planning: Understanding the rules and planning transactions accordingly
• Professional guidance: Engaging qualified tax advisors for complex matters
• Diligent compliance: Maintaining proper records and filing accurate returns
• Strategic positioning: Aligning investment strategies with the new tax reality

As Nigeria continues its journey toward a modernized, consolidated tax system, investors and tax practitioners must adapt to this new paradigm. The key to success lies in understanding not just the letter of the law, but also its practical implications and planning opportunities.

The Nigeria Tax Act 2025 is not merely a tax increase; it is a comprehensive reform aimed at broadening the tax base, improving equity, and supporting economic development. For investors willing to adapt their strategies and embrace compliant planning techniques, opportunities abound even within this higher-tax environment.