Operators in Nigeria’s capital market have called on the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms (FPTR), Mr. Taiwo Oyedele, to reconsider the proposed 30 per cent capital gains tax (CGT) on share disposals set to take effect in January 2026.
In an open letter dated October 2, 2025, and signed by Chief Executive of Emerging and Frontier Capital (EFC), Mr. Kato Mukuru, the operators warned that the policy could put significant pressure on the Nigerian Exchange (NGX) as domestic and foreign institutional investors rush to realise gains under the current tax regime before year-end.
They argued that while retail investors enjoy an annual exemption threshold of N150 million and Pension Fund Administrators (PFAs) also benefit from exemptions, institutional investors are excluded, a situation they described as inequitable. “How is this equitable?” Mukuru asked, noting that institutional funds restricted to equities would be unfairly taxed compared to those with the flexibility to reinvest in fixed income assets.
The operators also criticised the use of original purchase prices, even for shares bought over a decade ago, as a cost reference for CGT calculations. They urged the government to consider an exemption period starting from the January 2026 implementation date.
According to them, foreign investors, already facing foreign exchange risks, would be further discouraged by the CGT, increasing the cost of equity for Nigerian companies and making the country less attractive as an investment destination.
Meanwhile, despite the concerns, the NGX has recorded strong performance in 2025. Market capitalisation rose by 44.3 per cent in the first nine months, from N62.76 trillion at the start of the year to N90.58 trillion by September 30. The NGX All-Share Index also gained 38.65 per cent, closing at 142,710.48 points compared with 102,926.40 points at the end of 2024.
Analysts attributed the market growth to the federal government’s foreign exchange reforms, stability in FX markets, robust corporate earnings, banking recapitalisation, insurance reforms, and improved liquidity. Other contributing factors include the Central Bank of Nigeria’s cut in the Monetary Policy Rate to 27 per cent, declining inflation, attractive interim dividend payouts, and the listing of new firms such as Legend Internet Plc.
Commenting on the outlook, Managing Director of Globalview Capital Limited, Mr. Aruna Kebira, said falling inflation, lower interest rates, and positive corporate earnings were drawing investors toward the capital market. “If issuers continue to post strong performances and declare impressive interim dividends, the stock market will appreciate further,” he noted.
