Investors Dump Stocks As Increase In Capital Gains Tax Cuts N2tn From NGX

…Revisit Capital Gains Tax Increase, Izunaso Tells Finance Minister

The Chairman of the Senate committee on capital market and institutions, Senator Osita Izunaso, has said the Investment and Securities Act (ISA) will strengthen investor confidence, enhance market transparency, and position Nigeria’s capital market as a globally competitive investment destination.

Speaking at an Investment Forum organised by broadcaster and financial analyst, Nancy Nnaji, Izunaso praised the host for her contribution to financial literacy through her television programme, Moneyline with Nancy, describing it as a platform that has helped Nigerians better understand the nation’s evolving financial landscape.

The forum, themed “Nigeria’s New Financial Landscape: Reforms, Risks, and the Road to Wealth Creation,” comes at a time when Nigeria is implementing far-reaching economic reforms aimed at stabilising the financial system and attracting investment.

Izunaso said the ISA 2025 represents a major milestone in Nigeria’s capital market architecture, providing clearer rules, stronger regulatory enforcement, and improved investor protection. The law, he added, signals a new era for market integrity and credibility.

“One of the landmark provisions of the ISA 2025 is the reinforcement of regulatory oversight,” he said, noting that the Act gives the Securities and Exchange Commission greater powers to detect systemic risks early and enforce compliance.

This, he said, will help build trust among investors and ensure fair and transparent market operations.

He also highlighted strengthened investor protection under the new law, including stricter corporate governance standards, enhanced disclosure requirements, and easy access to redress mechanisms.

According to him, these measures are crucial for attracting long-term institutional investors whose participation is essential for sustainable market growth.

The senator added that the Act aligns reporting and disclosure standards with global best practices, positioning Nigeria as a credible investment destination capable of competing on the world stage.

While commending President Bola Tinubu for market-friendly reforms that have boosted investor confidence since 2023, Izunaso expressed concern over a recent tax policy under the Nigerian Tax Act 2025, which increases Capital Gains Tax on share transactions worth N150m and above from 10 percent to 30 percent, effective January 2026.

He warned that the announcement has already triggered panic sales among major investors, leading to an over N2tn loss in market capitalisation within a week.

Although taxation is necessary for revenue generation, Izunaso cautioned that fiscal policies must not undermine investor confidence or discourage long-term capital formation.

He appealed to the Minister of Finance to explore measures that will retain investor interest and avoid destabilising the market. A balanced approach, he said, is important to maintain the market’s current momentum.

He said, “Through decisive reforms, macroeconomic stabilization, and policies that have strengthened investor confidence, the administration has provided a foundation for sustainable growth in our capital markets.

“However, a recent development under the Nigerian Tax Act 2025 the increase of the Capital Gains Tax on the sale of shares worth N150m and above from 10 per cent to 30 per cent, effective January 2026 has created understandable concern among investors.

“In anticipation of this change, we have observed significant disposals by major investors, resulting in a notable decline in market capitalization over the past few days.

“As a matter of fact, the market lost over N2tn last week alone largely on account of this panic sale. While taxation is essential for revenue generation, it is equally critical that fiscal measures do not inadvertently undermine investor confidence or discourage long-term capital formation.

“I would like to respectfully suggest that the Minister of Finance explore mechanisms to address this concern, ensuring that both domestic and foreign investors remain engaged and confident in the Nigerian market. A balanced approach here will sustain momentum, protect market stability, and preserve the positive trajectory our capital markets have achieved.

Izunaso described the ISA 2025 as more than a legal reform, calling it a roadmap for building an inclusive, resilient, and globally competitive capital market that can support Nigeria’s target of achieving a $1trn economy by 2030.

He noted that if properly implemented, the Act will deepen market participation, strengthen institutions, and transform the capital market into a true engine of national development.

The senator commended Nancy Nnaji for convening the forum and for her continued role in promoting financial literacy.

He expressed confidence that engagements like the event, combined with reforms such as ISA 2025, would help position the capital market as a safe investment destination and a driver of economic transformation.