Nigeria’s Proposed 25% Capital Gains Tax Could ilise Market, Says Asset Manager

The Managing Director/CEO of Arthur Stevens Asset Management Limited, Mr Tunde Amolegbe, has stated that Nigeria’s proposed 25 per cent capital gains tax on investment profits could play a crucial role in reducing market volatility and discouraging speculative “hot money” flows, particularly from foreign investors.

Amolegbe spoke on Friday at the 2026 Macroeconomic Outlook event organised by the Capital Market Correspondents Association of Nigeria in Lagos.

Under the revised Nigeria Tax Act, the corporate capital gains tax rate will shift from a flat 10 per cent to a progressive 0–30 per cent rate, with large investors expected to pay 25 per cent under broader reforms.

Amolegbe noted that the reform encourages long-term investment strategies. “When you know that selling attracts a 25 per cent tax, you will think twice about coming in just for a short-term trade. That, in itself, is not a bad thing for the Nigerian market,” he said.

He explained that the measure would discourage rapid inflows and outflows of foreign funds, reducing sharp market swings. “It reduces volatility because you attract investors willing to stay for years, aiming to make returns sufficient to absorb the tax,” he added.

Amolegbe also highlighted a provision allowing reinvestment to avoid capital gains tax, which he described as a strong incentive for retaining capital within the economy.

Addressing concerns over foreign participation, he stressed that serious investors are more concerned with market ility and policy consistency than tax levels. He argued that the reform, combined with improved foreign exce ility and pre-election liquidity, could help reposition Nigeria’s capital market for sustainable growth ahead of the 2027 elections.

“This reform encourages discipline, longer holding periods, and better market behaviour. Over time, that is exactly what the Nigerian capital market needs to mature,” Amolegbe concluded.