- December 19, 2025
- Posted by: admin
- Category: Tax
If you’ve been paying attention to conversations in business circles lately, you’ve probably noticed one thing: tax is back in the spotlight. From WhatsApp groups to LinkedIn threads and X discussions, everyone seems to have something to say about the recent Capital Gains Tax changes coming in 2026.
Some people are worried. Others are confused. And a good number are reacting based on half-information.
So let’s slow things down and talk calmly about what actually changed, what didn’t, and why this matters for business owners, investors, and everyday asset holders in Nigeria.
First, Let’s Clear the Air
When the news about tax reforms started circulating, panic followed almost immediately. Stories flew around that every bank inflow would now be taxed. Some people even believed that receiving money from a friend or customer would automatically attract tax.
There was also the fear that once a business crosses a certain turnover threshold, it would suddenly be crushed by multiple new taxes.
These rumours spread fast because they touched on real fears. With rising costs and economic pressure, many Nigerians are already on edge. So when people hear “new tax laws,” the assumption is often that things are about to get worse.
But here’s the truth: much of the noise was based on misunderstanding, not the actual law.
So, What Is Capital Gains Tax Anyway?
Capital Gains Tax applies when you sell an asset for more than you paid for it. That asset could be land, shares, or other investment holdings. The profit you make from that sale is called a capital gain, and that gain is what gets taxed.
This is not a new tax in Nigeria. It has existed for years at a flat rate of 10 percent, quietly sitting in the background without much attention.
What’s new is how the government has decided to restructure it.
What Changed Under the New Rules
Under the new tax framework, Capital Gains Tax has been aligned more closely with income levels and business size.
For companies, the flat 10 percent rate is being replaced with a 30 percent rate, matching the standard Companies Income Tax. This move is aimed at simplifying the tax structure, even though it has sparked debate.
For individuals, the approach is different. Instead of a flat rate, the tax now follows a progressive system. This means lower gains may attract little or no tax, while higher gains are taxed at higher rates, potentially up to 30 percent.
The idea is simple in theory: people who earn more from asset sales should contribute more.
Relief for Small Businesses
Here’s a part many people missed in all the online noise.
- Small companies are not being squeezed. In fact, they’re being protected.
- Businesses with annual turnover of ₦100 million or less and assets below ₦250 million are completely exempt from Capital Gains Tax. No payment required.
- This is a significant improvement from the previous threshold and offers breathing space for growing businesses that are still finding their footing.
Share Sales and Other Exemptions
The reforms also expand exemptions around share disposals. If the gains from selling shares are below ₦10 million, and the total value of shares sold within 12 months does not exceed ₦150 million, no Capital Gains Tax applies.
This adjustment reflects economic realities and helps smaller investors avoid unnecessary tax pressure.
What About Crypto and Digital Assets?
For those involved in cryptocurrency or digital assets, the message is now very clear.
Gains from crypto and similar digital assets are taxable. Previously, this area existed in a grey zone. Now, it doesn’t.
If you buy digital assets, sell them at a profit, and realise a gain, that gain falls under Capital Gains Tax. Like it or not, digital assets are now fully on the tax radar.
Protecting Existing Investments
One thoughtful aspect of the reform is how it treats assets acquired before the new law takes effect.
Assets purchased before January 1, 2026, will benefit from a rebasing rule. This means the cost of the asset for tax purposes will be either what you originally paid or its market value as at December 31, 2025, whichever is higher.
In simple terms, you are not taxed on gains that occurred before the new regime. Only future appreciation counts.
An Incentive to Reinvest, Not Exit
There’s also a strong incentive built into the law to encourage reinvestment within Nigeria.
If you sell an asset and reinvest the proceeds into another Nigerian company within 12 months, the capital gain can be exempted from tax. This encourages long-term investment and keeps capital circulating within the local economy.
When Does This All Begin?
The new Capital Gains Tax rules take effect from January 1, 2026.
This means asset sales completed before December 31, 2025, will still be taxed under the old 10 percent system. For those already considering asset disposals, timing now matters more than ever.
What Asset Owners Should Be Doing Now
Preparation is key.
- Start by organising documentation for all major assets. Purchase dates, cost records, contracts, and payment evidence will be essential under the new rules.
- Next, review your investment plans. In some cases, selling before 2026 may be beneficial. In others, waiting and taking advantage of rebasing or reinvestment incentives may make more sense.
- Most importantly, seek professional guidance. With taxes becoming more detailed and interconnected, informed planning can prevent costly mistakes
The Bigger Picture
Nigeria’s tax landscape is evolving. These reforms are part of a broader attempt to modernise the system, improve fairness, and widen participation without stifling growth.
Change always brings uncertainty, but it also creates opportunities for those who understand the rules early.
At FSC Professionals, we believe clarity is power. As 2026 approaches, staying informed and prepared will make all the difference.
Stay tuned for more insights as we continue to break down what Nigeria’s changing tax environment means for individuals and businesses alike.