The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele has explained that Nigeria’s 2026 tax reform law is deliberately structured to protect low-income earners while boosting disposable income and encouraging investment.
Speaking at the Cowry Quarterly Economic Discourse themed “Nigeria in 2026: Will Politics Trump Economic Reform?”, Oyedele addressed widespread concerns and misconceptions about the new tax regime, particularly around capital gains tax.
He clarified that small-scale investors in the capital market are completely exempt from paying capital gains tax. According to him, the law grants an automatic exemption to individuals whose total proceeds from asset sales do not exceed ₦150 million, provided the gains are not more than ₦10 million within a 12-month period.
“The law is very clear. Everyone is entitled to capital gains tax exemption if their proceeds are not more than ₦150 million and their gains do not exceed ₦10 million in a year. This exemption is automatic, no explanations and no conditions attached,” Oyedele said.
He added that pension fund administrators and real estate investment trusts also enjoy capital gains tax exemptions, as long as the proceeds from asset sales are reinvested. High-net-worth individuals, he explained, only become liable to pay capital gains tax when they sell assets and choose not to reinvest the proceeds.
“If a multi-billionaire sells shares worth ₦2 billion and exits the investment permanently, then tax applies. But if the money is reinvested, the exemption still stands. What is paid instead is a small transaction cost, which actually helps stimulate market activity,” he noted.
Oyedele described Nigeria’s capital gains tax framework as one of the most competitive in the world, stressing that it promotes reinvestment, improves market liquidity, and supports long-term growth. He also assured investors that the committee is finalising implementation guidelines to address grey areas, while any amendments requiring legislative approval will be forwarded to President Bola Tinubu.
The tax expert also dismissed fears around taxing digital and virtual asset investments, noting that most young Nigerians invest at very small scales.
“These young people are not investing millions of dollars. They invest $50, $80, or $200. That’s what adds up over time,” he said, adding that capital market investments often offer better returns and are fully exempt from capital gains tax.
He warned that misinformation has discouraged many young Nigerians from participating in the stock market, with some wrongly believing that investment returns attract taxes of up to 30 per cent.
“Ask young people on the street and they will tell you the stock market is taxed at 30 per cent, simply because nobody is telling them the truth that they are exempt,” he said.
Beyond investments, Oyedele said the 2026 tax reform law is focused on ending what he described as the “taxation of poverty.” 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 deductions and reliefs.
“The ₦800,000 figure people mention is taxable income, not gross income. After deductions and allowances, that translates to about ₦1 million to ₦1.2 million in gross earnings. Even at that level, anyone earning the minimum wage pays no tax,” he explained.
Oyedele recalled that data previously presented to the Federal Government showed that about 96 per cent of personal income tax in Nigeria came from low-income earners, a situation he described as unfair and economically harmful. “We were taxing poverty, and that is not how a functional economy should work,” he said.
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