Nigeria: PwC Report Highlights Nation's High Capital Gains Tax Rate

Nigeria has introduced a 30% headline capital gains tax rate, making it the highest among selected major African economies, according to a new report by PwC Nigeria. The reforms have fundamentally altered Nigeria's capital gains tax landscape by increasing the tax rate for companies from 10 per cent to 30 per cent and expanding the government's taxing rights to cover certain offshore transactions involving Nigerian companies and assets.

The legal significance of this development lies in its potential impact on investors and businesses operating in Nigeria. The increased tax rate and expanded taxing rights may deter foreign investment, particularly in the capital market, which has already seen a significant wipe-out of N2 trillion due to the Capital Gain Tax. Stakeholders have raised concerns over the increase, calling for the government to revisit the Act.

The relevant statutes involved are the Nigeria Tax Act (NTA), which came into effect on January 1, 2026. The NTA has introduced significant changes to Nigeria's capital gains tax regime, including the increased tax rate and expanded taxing rights. The Capital Gain Tax is imposed on chargeable gains arising from the sale of assets such as equities, all forms of properties, digital assets, and others.

The key parties involved are the Nigerian government, represented by the National Assembly, which passed President Bola Ahmed Tinubu's four tax reform bills, including the NTA. The report by PwC Nigeria highlights the potential consequences for investors and businesses operating in Nigeria, particularly those involved in offshore transactions involving Nigerian companies and assets.

Practitioners should monitor the implementation of the new capital gains tax regime and its impact on investors and businesses operating in Nigeria. Attorneys may need to advise clients on the implications of the increased tax rate and expanded taxing rights, particularly in relation to offshore transactions involving Nigerian companies and assets.