Taiwo Oyedele dismisses reports of investor frustration over capital gain tax law

Taiwo Oyedele, chairman of the presidential fiscal policy and tax reforms committee, has dismissed reports suggesting that foreign investors expressed frustration over Nigeria’s capital gains tax (CGT) reform during a recent virtual engagement.

In a post on X on Monday, Oyedele said the online reports the CGT mischaracterised both the policy and “my engagements with key stakeholders”.

“Given their reach and credibility, it is important to set the record straight,” he said.

“Public debate is vital for reform. But debate must be anchored on facts, not misrepresentation.”

The tax expert said contrary to the reports that the meeting was marked by “palpable disappointment and unease,” participants found the session useful and engaging.

“Contrary to claims of “frustration” and “unease,” about 80% of participants who gave feedback after the event rated the engagement 9 or 10 out of 10, with an overall average of 8.6,” Oyedele said.

The chairman clarified that his remark about the bottom 97 percent of Nigerians being unable to pay tax while the government focuses on the top 3 percent was made in the context of low-income earners and nano businesses.

He said exempting the poor while taxing the wealthy “fairly is not socialism”.

“It is progressive taxation, a principle embedded in virtually every advanced economy,” he added.

On concerns about competitiveness, Oyedele said advanced markets such as the United States (US), United Kingdom (UK), and South Africa apply capital gains tax and remain attractive to investors, while many countries with no CGT lack robust capital markets.

According to Oyedele, competitiveness depends on overall returns and risk factors — not on the absence of CGT.

The committee chair also addressed claims regarding tax jurisdictions, saying nearly all investors are taxable in their home countries.

“Where they are not, it is only fair that the source country collects its fair share of tax,” he said.

‘NIGERIA NOT TRIPLING CGT FOR FOREIGN INVESTORS’

The committee chairman further refuted claims that Nigeria is tripling CGT for foreign equity investors, saying both local and foreign investors enjoy exemptions based on thresholds and reinvestment.

“Tax applies only where those thresholds are exceeded without reinvestment. Labelling this as a punitive tax on foreign investors is misleading,” the chairman said.

He noted that since May 2023, investors in Nigeria’s capital market have earned average returns of over 100 percent — even in US dollar terms — through capital gains, dividends, and currency appreciation.

The expert said expecting investors who wish to exit to pay tax on their net gains is neither unusual nor hostile, but reflects tax equity.

On the broader tax reform effort, the chairman said the initiative seeks to promote progressivity and equity across the board while addressing multiple issues affecting the capital market.

“This is an opportunity to attract more investments into the market especially by retail investors away from gambling and virtual assets trading that today attract more interest from Nigerians than the capital market,” he said.

Oyedele urged the media to play its role responsibly, asking them to interrogate and inform rather than sensationalise and mislead.