Capital gains tax jumps 429% to N12.18bn

Capital gains tax revenue surged by about 429 per cent in December 2025 to N12.18bn, up from N2.30bn in November, as fresh tax reforms stoke expectations of a higher 30 per cent rate.

Data from a Federation Accounts Allocation Committee document from the January 2026 meeting obtained by The PUNCH on Thursday showed that capital gains tax collections rose by N9.88bn month on month, showing a sharp acceleration in receipts from asset disposals at the end of the year.

In Nigeria, capital gains tax applies when assets such as land, buildings, shares, business interests, digital assets, or other investment property are disposed of through sale, transfer, or assignment.

The purpose of the capital gains tax is to ensure that profits made from asset appreciation contribute to public revenue, just like income earned from business operations or salaries.

The increase marked one of the strongest month-on-month growth rates among non-oil revenue lines, placing capital gains tax firmly on the radar as the Federal Government intensifies efforts to widen its tax base amid volatile oil earnings.

According to the document, capital gains tax contributed N686.66bn to non-oil revenue in December 2025, up from N557.16bn in November. The overall non-oil revenue pool expanded by N129.50bn within the month.

Company income tax rose by N56.05bn to N320.74bn in December from N264.69bn in November, while import duty climbed by N56.25bn to N297.65bn.

Stamp duty collections through the Treasury Single Account also jumped sharply, increasing by N7.81bn to N10.80bn.

The FAAC figures showed that capital gains tax alone accounted for nearly eight per cent of the total non-oil revenue increase in December, highlighting its growing fiscal importance as reforms reshape Nigeria’s tax landscape.

Oil revenue remained mixed. Gas sales royalty declined by N4.65bn to N3.35bn, while petroleum profit tax contributed N63.27bn in December after recording no inflow in the previous month. Combined oil and non-oil revenue rose to N811.01bn in December from N565.95bn in November.

Value Added Tax remained the largest single revenue source, rising by N350.91bn to N913.96bn in December from N563.04bn in November. Revenue from the Electronic Money Transfer Levy fell by N3.49bn to N39.91bn.

Overall, the total revenue increased by N592.47bn to N1.76tn in December, compared with N1.17tn recorded in November, according to the FAAC document.

The sharp jump in capital gains tax comes as policymakers push forward with plans to overhaul Nigeria’s tax system, including proposals to align capital gains tax for companies with the standard company income tax rate of 30 per cent.

The Capital Gains Tax is charged on profits (gains) realised from the disposal or sale of shares or other equity instruments. Under the new regime, CGT ensures that investors who profit from rising share prices contribute to public revenue.

The Capital Gains Tax rate was increased from 10 per cent to 30 per cent for large companies. For individuals, capital gains are taxed at the applicable income tax rate within their progressive tax band.

Also, the tax exemption threshold for the sale of shares in Nigerian companies has been increased to N150m (from N100m) in any 12 consecutive months, provided that the gains do not exceed N10m, clarified PwC in its Tax Insight Series and Sectoral Analysis report.

The Association of Securities Dealing Houses of Nigeria earlier called on the Federal Government to review the recently introduced Capital Gains Tax on securities, following a sharp N6tn decline in market capitalisation in November.

The plea came from ASHON’s recently inaugurated Chairman, Seinde Adenagbe, who warned that the sudden policy change threatens investor confidence and undermines market stability.

However, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr Taiwo Oyedele, said the introduction of a 30 per cent capital gains tax will boost the valuation of Nigerian companies and yield long-term benefits for the economy.

Speaking at the 31st Nigerian Economic Summit in Abuja, he explained that Nigeria has tripled the capital gains tax for foreign equity investors on the sale of Nigerian shares from January, unless the proceeds are reinvested in other listed or unlisted domestic equities.

Responding to concerns about the potential impact of the new tax, Oyedele clarified that small businesses and low-income earners would be exempt.

“We have eliminated the special rate for capital gains tax. It now aligns with the income tax rate of the payer. If a small business pays zero per cent corporate tax, its capital gains tax is also zero per cent. Likewise, low-income earners exempted from PAYE will pay no capital gains tax,” he explained.

He noted that investors who sell shares worth up to N150 m annually will not pay capital gains tax, a policy that exempts more than 99 per cent of investors. Oyedele said the reforms would improve business valuations by enhancing profitability and cash flow, which are critical to investment decisions.

Source: https://punchng.com/capital-gains-tax-jumps-429-to-n12-18bn/