Capital Gains Tax: FG engaging investors – Edun

2026-02-21 - 13:36

Emma Ujah, Abuja Bureau Chief The federal government is currently engaging capital market investors on the 30 percent Capital Gains Tax, over which some investors have expressed concerns. The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, disclosed this while briefing the press on the state of the nation’s economy in Abuja, yesterday. According to him, the federal government was determined to make the best of the Tax Act, which came into effect last month, and does not want it to be a disincentive to any category of investors in the country. His words, “Private equity in particular, but investors in general, whether you’re private equity, whether you’re investing in the public markets, less so if you’re investing in the short -term, fixed income markets, enjoying relatively high interest rates, but ready to go at the drop of a hat. No, we like patient capital, we like investors that invest in facilities, that creates jobs. Yes, make your profit over time, but add value to the Nigerian economy, help us to grow, create jobs and reduce poverty. “So it’s not just private equity that we’ll focus on, but you have made the point that they are particularly affected, I’ll use the word, they are particularly affected by a certain clause, the Tax Implementation Committee will engage them, will look at it, the doors are open and I’m sure, and I think there was a day at the Nigerian Stock Exchange where I personally committed that we would have a dialogue on this particular issue. FG reviews revenue agencies’ Cost of Collection The minister revealed that a committee of the Federal Executive Council (FEC) was reviewing the current deductions by revenue agencies as Cost of Collection. According to him, some of the affected agencies were taking more funds as Cost of Collection than they actually need, necessitating a review to ensure greater prudent resources utilization by each of them. His words, “That’s part of accountability and transparency. The cost of collection, yes. As I said earlier, there’s a committee of the Federal Executive Council that was asked to look at the cost of collection and it has put in its report, you know, as you say, others have also done the calculation and they can see that the cost of collection, which is based on the overall collection, not on necessarily on the organization’s even need or costs or budget. “So it can be anything related to, or not related to the needs of that particular agency. But what I will say is this, apart from the fact that there has been a scrutiny and as I said, it’s related also to the recent Executive Order. It’s all about looking at deductions, because those costs of collection, also deductions from Federation Account, just as the PIA deductions, management fee from the deductions from federation account, they’re all being looked at and scrutinized. “At a time, as I said, when the financial markets are particularly unfriendly to developing countries, we have to look at the alternative and the alternative is our own funds, our own resources, our own revenues and capacity to not just collect them, but also to effectively spend them. “So that will come out in due course, exactly what the figures are from the cost, first of all, from the executive order and likewise from the cost of collection. But let me also add that under the financial regulations, under the Fiscal Responsibility Act, effectively, no matter what the likes of NUPRC or others collect, they’re only entitled to spend maximum 50% of it, their surplus must come to the government. “But in this particular case, we’re even looking at not so much that the percentage they’re allowed to spend, but the quantum, trying to make sure that they’re not spending more, that their budget in fact is not larger than it should be, because they are restricted by the fiscal response. So they cannot spend 100%, they can’t say their budget is 100% of what they collected. So there are some checks and balances there. “The way we are going is that you will see some agencies, they have more money than state governments and so that must and is being looked at. And I’ll just reiterate that even before this Executive Order came out, there’s already a report to the Federal Executive Council looking at cost of collection and the handling and the quantum of that, all in an attempt to conserve the money of Nigerians for investment in social services, critical infrastructure and public services. The minister said that a forensic audit of the Nigerian National Petroleum Company Limited (NNPCL) was ongoing to determine the amount of the organisation’s underpayment to the Federation Account, over the years. He explained that the recent Executive Order was to increase NNPCL’s oil revenue remittance into the Federation Account and make more money available to the three tiers of government. Mr. Edun, reiterated the elevated cost of borrowing abroad due to the unfavourable credit rating of developing countries and urged Nigerians to mobilise domestic resource and invest in the Nigerian economy.