According to the provisions of the Finance Act of 2021, it mandates investors on the Nigerian Stock Exchange to now pay a Capital Gains Tax of 10% on the sale of shares. The tax is applicable on the disposal of shares worth N100 million and above.
The tax also extends to anyone selling shares of any company even if the shares are not listed on the stock exchange which includes the sale of shares by private equity firms, startups, venture capitalists, or any shareholder looking to sell shares in Nigeria.
The new finance acts however excludes anyone who sells shares and reinvests the proceeds in purchasing another company’s shares or the shares of the same company within the same year. However, this is provided that you invest all the proceeds within a year. Any part of the proceeds not reinvested will be taxed while the balance reinvested will not be taxed.