Nigeria to Increase Capital Gains Tax to 25% by 2026, Impacting Investor Sentiment

Nigeria's plan to increase its capital gains tax from 10% to 25% starting in January 2026 has sparked mixed reactions among investors. The new regime, outlined in the Tax Reform Act signed in October 2025, marks a significant shift from the country's historically low tax jurisdiction status.

Under the new structure, the 25% rate will apply to net capital gains exceeding N150 million, with investors allowed to offset losses against gains. The move aims to align Nigeria's capital gains tax with its corporate income tax rate, introducing a fairer system to ensure genuine profit taxation.

However, analysts warn that the steep jump may reduce the country's investment appeal, especially for large-scale transactions like mergers, private equity exits, and real estate disposals. This change puts Nigeria in line with other African economies like Rwanda, Ghana, Kenya, Morocco, and South Africa, which have varying capital gains tax rates as part of their fiscal policies.