Tax Reforms Aimed at Safeguarding Low-Income Nigerians — Oyedele

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has explained that small-scale capital market investors are fully exempt from capital gains tax, stressing that the 2026 tax reform law is designed to protect low-income earners and boost disposable income. Oyedele made this known at the Cowry Quarterly Economic Discourse themed “Nigeria in 2026: Will Politics Trump Economic Reform?”, where he addressed concerns and misconceptions surrounding the new tax framework. He noted that the law grants automatic capital gains tax exemptions to individuals whose total proceeds from asset disposals do not exceed N150m, provided the gains are not more than N10m within a 12-month period. According to him, the exemption applies automatically without conditions or explanations. He added that pension fund administrators and real estate investment trusts also qualify for exemptions as long as proceeds are reinvested. High-net-worth individuals, he said, only become liable to capital gains tax when they permanently exit investments without reinvesting the proceeds. Oyedele described Nigeria’s capital gains tax regime as one of the most competitive globally, saying it promotes reinvestment, liquidity, and growth in the capital market. He assured investors that implementation guidelines are being developed to address grey areas, while any amendments requiring legislative approval will be forwarded to President Bola Tinubu. He also noted that most young Nigerians investing in digital and virtual assets do so on a small scale, making taxation fears largely unfounded. According to him, misinformation has discouraged youth participation in the stock market, with many wrongly believing investment returns attract taxes of up to 30 per cent. On the broader goals of the 2026 tax reform law, Oyedele said it aims to end the taxation of poverty, shield low-income earners, and ensure that those with greater capacity to pay contribute more fairly. He explained that Nigerians earning the national minimum wage are fully exempt from personal income tax, while the threshold for taxable income has been significantly raised after allowable deductions and reliefs. He recalled that earlier data presented to the government showed that about 96 per cent of personal income tax previously came from low-income earners, a situation he described as unfair and economically harmful, noting that such a system amounted to taxing poverty rather than supporting growth.