The Senate has referred to as on the Minister of Finance and Coordinating Minister of the Economic system, Wale Edun, to urgently assessment the brand new 30 p.c Capital Features Tax (CGT) on giant share gross sales, following an enormous N2 trillion market loss that rocked the Nigerian Inventory Trade final week.
The tax hike, contained within the not too long ago handed Nigerian Tax Act 2025, raises CGT on share disposals price N150 million and above from 10 p.c to 30 p.c, with implementation scheduled to start in January 2026.
Chairman of the Senate Committee on Capital Market and Establishments, Senator Osita Izunaso, made the enchantment on Wednesday whereas presenting a paper titled “Redefining the Guidelines: The Funding and Securities Act 2025 and the Way forward for Nigeria’s Capital Market” on the Moneyline with Nancy Funding Discussion board 2025 held in Abuja.
Izunaso stated the sudden adjustment within the tax regime has unsettled traders, resulting in a wave of panic-driven share disposals that worn out greater than N2 trillion in market worth inside per week.
Izunaso counseled President Bola Ahmed Tinubu for the renewed vibrancy in Nigeria’s capital market since 2023, attributing the progress to reforms which have stabilized the macroeconomic setting and improved coverage coherence.
“Nonetheless, there’s something worrisome. The latest improvement beneath the Nigerian Tax Act 2025. The rise in Capital Features Tax on share gross sales above N150 million is worrisome. This has created comprehensible concern amongst traders. In anticipation of this alteration, we’ve got noticed vital disposals by main traders, leading to a notable decline in market capitalization over the previous few days,” he stated.
Senate to interact Finance Minister
In keeping with him, the market misplaced over N2 trillion inside per week as a result of panic-driven transactions, including that whereas taxation is important for nationwide income, fiscal insurance policies have to be designed to keep away from eroding investor confidence or discouraging long-term funding.
“Whereas taxation is important for income era, it’s equally vital that fiscal measures don’t inadvertently undermine traders’ confidence or discourage long-term capital formation.
“The Senate Committee on Capital Market will probably be participating the Honourable Minister of Finance to recommend to the minister to discover a mechanism to deal with this concern, guaranteeing that each home and international traders stay engaged and assured within the Nigerian market,” he famous.
He urged that the Finance Minister train discretion in implementing sure points of the brand new tax legislation, notably these with far-reaching implications on capital formation and market stability.
“We’re conscious that the brand new legislation is meant to start by January 2026. However we’re suggesting that there are some provisions of that Act that require the graduation to start solely when the Honourable Minister of Finance advises the Govt. I feel that is a kind of issues that ought to not start on January 1, as a result of it’s already affecting the market,” he defined.
What you must know
Not too long ago, the Chairman of the Presidential Fiscal Coverage and Tax Reforms Committee, Taiwo Oyedele clarified that Nigeria’s new Capital Features Tax (CGT) framework won’t retroactively tax funding good points made earlier than 2026.
On the coronary heart of the clarification is a value foundation reset, and a grandfathering clause designed to protect previous good points whereas making use of tax solely to new earnings made after the reform takes impact.
Nairametrics additionally reported Edun has pledged that the Federal Authorities will undertake a cautious and consultative strategy in implementing the not too long ago enacted tax reform legal guidelines, notably the contentious capital good points tax (CGT) on securities transactions.