The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, has clarified that Nigeria’s 2026 tax reform law fully exempts small-scale investors in the capital market from paying capital gains tax, describing widespread fears over the policy as a product of misinformation rather than reality.
Oyedele made the clarification at the Cowry Quarterly Economic Discourse themed “Nigeria in 2026: Will Politics Trump Economic Reform?”, where he addressed growing public concerns about the impact of the new tax regime on ordinary Nigerians, particularly young investors.
According to him, the law provides an automatic capital gains tax exemption for individuals whose total proceeds from asset disposal do not exceed ₦150 million, provided the gains are not more than ₦10 million within a 12-month period.
“The law says everyone is entitled to an exemption on capital gains tax. If the proceeds are not more than ₦150 million and the gain is no more than ₦10 million in 12 months, the exemption is automatic, with no explanation and no conditions attached,” Oyedele said.
Reinvestment Encouraged, Big Exits Taxed
Oyedele explained that the reform is structured to encourage reinvestment and market liquidity rather than punish investment success. Pension fund administrators and real estate investment trusts, he noted, also enjoy capital gains tax exemptions, provided proceeds from asset sales are reinvested.
High-net-worth individuals only become liable to capital gains tax when they exit investments permanently without reinvesting.
“If a multi-billionaire sells shares worth ₦2 billion and decides not to reinvest, then tax is payable. But if the proceeds are reinvested, the law allows that exemption. What you pay instead is a minimal transaction cost, which also stimulates market activity,” he explained.
He described Nigeria’s capital gains tax framework as one of the most competitive globally, stressing that it is designed to promote long-term investment, liquidity, and growth in the capital market.
Youth Investors Largely Unaffected
Addressing concerns among young Nigerians, Oyedele said most youth participation in digital, virtual, and capital market investments occurs at very small scales, making taxation fears largely misplaced.
“These young people are not investing millions of dollars. They invest $50, $80, and $200. That is what adds up. Meanwhile, capital market investments offer better returns, even in dollar terms, and they are fully exempted,” he said.
He warned that misinformation has discouraged youth participation in the stock market, with many wrongly believing that investment returns attract taxes of up to 30 per cent.
“If you ask young people on the street, they will tell you the stock market is taxed at 30 per cent because nobody is telling them they are exempted,” Oyedele noted.
Ending the Taxation of Poverty
Beyond capital market reforms, Oyedele said the broader objective of the 2026 tax reform law is to end what he described as the “taxation of poverty” in Nigeria, protect low-income earners, and ensure that those with greater capacity to pay shoulder a fairer share of the tax burden.
Under the new framework, Nigerians earning the national minimum wage are fully exempt from personal income tax, while the threshold for taxable income has been significantly increased after allowable deductions and reliefs.
“The ₦800,000 people talk about is taxable income, not gross income. By the time you remove deductions and allowances, that translates to about ₦1 million to ₦1.2 million gross income. And even at that, anyone earning the minimum wage pays no tax at all,” he explained.
Oyedele recalled that data previously presented to the Federal Government showed that about 96 per cent of personal income tax revenue in Nigeria came from low-income earners, a situation he described as inequitable and economically dangerous.
“We were taxing poverty. That is not how a functional economy works,” he said.
He added that the committee is currently drafting detailed implementation regulations to address grey areas in the law, while any necessary legislative amendments will be forwarded to President Bola Tinubu for consideration.
For Oyedele, the message is clear: the 2026 tax reform is not designed to punish ordinary Nigerians, but to stimulate investment, protect the vulnerable, and build a more equitable and growth-driven economy.
