With only weeks before the January 1 implementation of the 2025 Nigeria Tax Act, concerns are intensifying across Nigeria’s business community. Industry analysts, investors, and economic stakeholders warn that the sweeping reforms could trigger capital flight and place additional strain on the country’s investment climate.
Signed into law in June 2025, the Act delivers one of the most far-reaching fiscal overhauls in decades. Its headline provisions include:
Raising Corporate Capital Gains Tax (CGT) from 10% to 30%, Introducing a new 4% Development Levy on company profits, Implementing a 15% Minimum Effective Tax Rate for multinational corporations and Reworking long-standing incentives for Free Trade Zones (FTZs)
Dele Kelvin Oye, Chairman of the Alliance for Economic Research and Ethics LTD/GTE and the Nigeria Turkiye Business Council, said in a statement that the reforms represent “the most significant overhaul of the nation’s fiscal landscape in a generation.” He warned that the changes could limit the investment and business growth needed for Nigeria’s long-term economic stability.
Oye, a former National President of NACCIMA, described the tripling of capital gains tax as the Act’s most alarming feature. According to him, the higher rate sharply reduces potential investor returns and makes Nigeria less competitive compared to emerging regional rivals.
He noted that Nigeria is at “a critical juncture,” facing volatile oil revenue, rising debt obligations, and urgent development demands. The government’s push for comprehensive fiscal reform aims to stabilise revenue by consolidating over a dozen tax laws into a streamlined system. While the intentions—curbing evasion, boosting transparency, and widening the tax base—are widely acknowledged, many argue that the real-world effects may be counterproductive.
Oye highlighted concerns over the steep CGT increase, the new Development Levy, and uncertainty around FTZ incentives, describing them as measures that could weaken profitability and discourage investment. He questioned whether the Act prioritises long-term growth or short-term revenue targets, especially as other African nations—such as Ghana, Ethiopia, and Rwanda—push reforms designed to attract capital through the African Continental Free Trade Area (AfCFTA).
As the Jan. 1 rollout approaches, he urged policymakers to reassess key provisions and adopt adjustments that balance revenue needs with private-sector-led growth. He warned that without recalibration, Nigeria risks erecting barriers that could push investment towards more business-friendly markets.
The new Act also restructures several existing taxes under a unified 4% Development Levy, intended to simplify compliance and create a direct funding line for national projects. However, business leaders argue that the cumulative impact of the reforms may increase operational pressures at a time when many companies are already struggling with rising costs.
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