The Nigerian Tax Act (NTA) 2025 has introduced significant changes to the country's tax regime, particularly with regards to chargeable assets. Under Sections 33 to 34 of the Act, virtually all forms of property, whether situated in Nigeria or elsewhere in the world, are now considered chargeable assets. This broad definition includes digital currencies, virtual assets, rights, debts, and incorporeal property, pulling them directly into the tax net. As a result, business owners and investors need to reassess their investment strategies to avoid significant tax and legal risks.
The new law dictates that gains accruing to any person in a year of assessment from the disposal of assets are chargeable to tax. Chargeable assets are not restricted to physical real estate or corporate shares; they also cover shares, options, rights, debts, digital or virtual assets, incorporeal property, and currencies other than the Nigerian Naira. The definition even extends to property created by the person disposing of it or property that comes to be owned without being formally acquired. This extensive scope aims to capture a wide range of transactions that were previously assumed to be tax-free.
The NTA 2025 provides clear statutory safe harbors for Nigerian shares. Gains from the disposal of shares in a Nigerian company are exempt from tax if the disposal proceeds in aggregate are less than N150 million and the chargeable gain does not exceed N10 million in any 12 consecutive months. Additionally, shares transferred between an approved borrower and lender in a regulated securities lending transaction are exempt, as are disposals where proceeds are reinvested within the same year of assessment into shares of the same or another Nigerian company.
To qualify for the share disposal exemption under Section 34 of the NTA 2025, investors must maintain continuous, rolling 12-month transaction tracking. If total disposal proceeds reach N150 million or aggregate gains exceed N10 million across any consecutive 12-month period, every subsequent share transaction within that window becomes fully subject to capital gains tax, regardless of individual transaction sizes. This requires investors to be vigilant in monitoring their transactions to avoid unexpected tax liabilities.
The law also introduces specific operational mechanics for digital and virtual assets. Revenue authorities determine cost bases and taxable gains on crypto tokens and virtual assets by using the fair market value in Naira at the exact time and date of the disposal transaction. Taxpayers are required to maintain verifiable exchange transaction logs, conversion receipts, and platform settlement records to substantiate their cost base and avoid punitive zero-cost assessments during an audit.
For property created directly by the taxpayer, such as proprietary software or digital artwork, the allowable cost base is limited strictly to documented, direct production costs. Where property comes to be owned without a formal purchase transaction, the baseline cost is treated as nil unless the taxpayer can present verifiable legal documentation or valuation reports establishing an initial acquisition value recognized under the law. This highlights the importance of maintaining accurate records to support cost bases.
The expanded scope of chargeable assets creates hidden vulnerabilities across everyday commercial and investment activities. Overlooking these changes can lead to severe retrospective tax liabilities, particularly in areas such as digital asset swaps, reinvestment documentation, and debt and right assignments. To navigate the modern capital gains regime successfully, investors and corporate finance teams must adopt proactive compliance habits, including systematically cataloging all asset disposals and maintaining accurate records.
Key points
- The new tax law in Nigeria considers virtually all forms of property as chargeable assets, including digital currencies and virtual assets.
- The law provides exemptions for certain share transactions, such as disposals where proceeds are reinvested within the same year of assessment.
- Taxpayers must maintain accurate records to support cost bases and avoid punitive assessments during an audit.
