Experts warn on Nigeria’s new capital gains tax

Financial analysts are urging Nigerian authorities to reassess plans for implementing revised capital gains taxation scheduled to replace a suspended flat levy with progressive rates reaching 30 percent based on income levels. Muda Yusuf from the Centre for the Promotion of Private Enterprise warned the threefold rate jump could trigger capital flight and discourage investment flows despite potential short-term revenue gains, while Femi Ademola of AIICO Capital questioned whether current market conditions support introducing the measure, given its probable impact on foreign portfolio participants.

David Adonri at HighCap Securities described the policy as hostile to institutional participants and wealthy individuals conducting large transactions, arguing that developing economies require incentives rather than burdensome taxation to stimulate private capital formation. Presidential committee chairman Taiwo Oyedele defended the framework by noting exemptions for transactions below 150 million naira and various institutional investors, while explaining that acquisition costs for existing holdings will reset to higher values as of year-end to ensure equitable treatment.