30% Capital Gains Tax, Indirect Transfer Rules Reshaping Nigeria Deals—PwC

PwC has said investors in Nigerian companies will now face higher tax costs and tougher compliance requirements following reforms that subject indirect offshore share sales to Capital Gains Tax at 30 per cent.

In its report titled, ‘Nigeria’s Capital Gains Tax reforms: What the new 30 per cent rate and indirect transfer rules mean for investors’, the professional services firm said the commencement of the Nigeria Tax Act on January 1, 2026 marks a major shift in Nigeria’s tax landscape.

Under the new regime, a deal involving the sale of a foreign company in London, Dubai, Amsterdam, Johannesburg or any other jurisdiction can now create tax consequences in Nigeria, even where the transaction does not involve a direct transfer of Nigerian shares.

The Nigeria Tax Act (NTA) raises the CGT rate for companies from 10 per cent to 30 per cent, aligning it with the corporate income tax rate.

More significantly, the law brings indirect transfers within the scope of CGT. Section 46(f) deems shares in a foreign entity to be located in Nigeria where, in the 365 days before disposal, more than 50 per cent of their value is derived from Nigerian assets. Section 47 further taxes disposals that result in a change in ownership of any Nigerian company or asset.

PwC noted that Nigeria now combines the highest headline CGT rate among major African economies with one of the broadest indirect transfer regimes on the continent.

The firm said the reforms will influence how investors evaluate and structure investments involving Nigerian assets.

“The expanded scope of the rules may increase the importance of tax due diligence, valuation analyses, and transaction planning, particularly for cross-border transactions and corporate reorganisations,” PwC stated.

It added that investors will need to place greater emphasis on available exemptions, reinvestment reliefs and other incentives when assessing opportunities.

The report also highlighted potential benefits including the ability to claim input VAT on a broader range of expenses and access to economic development incentives.

PwC flagged several uncertainties that may require clarification. These include whether capital losses are deductible for companies, if operating losses can be offset against capital gains, filing obligations where a disposal results in a loss, and the absence of statutory guidance on share identification and valuation methods for indirect transfers.

“By aligning the taxation of chargeable gains more closely with the broader income tax framework and extending coverage to indirect transfers, Nigeria has modernised its CGT regime and significantly strengthened its ability to tax value derived from Nigerian assets,” the report concluded.

The firm urged the authorities to issue further guidance through legislative amendments or regulations to provide taxpayers with greater certainty as they navigate the new rules.