Capital gains tax hits record N522bn in 2025

Capital Gains Tax collections rose sharply to N522bn in 2025, representing an 869 per cent performance against target and underscoring the impact of asset divestments by upstream oil and gas firms, figures obtained by Sunday PUNCH have shown.

The Executive Director, Government and Large Taxpayers at the Nigeria Revenue Service, Amina Ado, presented the figures at the NRS Management Retreat in Abuja recently, where she outlined the Service’s 2025 performance and strategic outlook.

Data from the presentation showed that CGT collections climbed from N52bn in 2024 to N522bn in 2025, a year-on-year increase of N470bn, or about 903.8 per cent. The 2025 outturn also far exceeded the N60bn target set for the year, translating to a performance rate of 869 per cent.

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.

In the key takeaways from the presentation, the Service attributed the surge in CGT to divestments by upstream oil and gas firms, reflecting a wave of asset sales and restructuring in the sector.

The presentation document read, “The performance rate (Jan – Dec) for CGT is 869 per cent. High CGT was due to divestments by upstream oil and gas firms.”

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.

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, PwC clarified 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 N150m 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.(Punch)