Economy | Taxes & Tariffs

Lagos State Government Issues Public Notice on the Chargeability of Capital Gains Tax on Gains from the Disposal of Securities

Jun 23, 2022   •   by   •   Source: Lagos State Govt   •   eye-icon 1049 views

The Lagos State Internal Revenue Service (LIRS) is issuing this Public Notice to the general public, particularly operators within the Stock Exchange and Financial Securities Market.


Gains accruing from the disposal of financial securities of Nigerian Government securities, stocks and shares have enjoyed an exemption from capital gains tax, pursuant to section 30 of the Capital Gains Tax Act (CGTA).

However, the Finance Act 2021 has amended the above provision by inserting a new section 30 to replace the old one. The section provides that gains accruing from disposal of Nigerian Government securities shall not be chargeable to tax under the CGTA. Nonetheless, gains received or accruing from the disposal of shares of companies registered in Nigeria under the Companies and Allied Matters shall be chargeable to CGT except where —

  1. Proceeds of such disposal are reinvested within the same year of assessment in the acquisition of shares in the same or other Nigerian companies: Provided that tax shall accrue proportionately on the portion of the proceeds which are not reinvested in the manner stipulated above; ‘
  2. The disposal proceeds, in aggregate is less than N 100,000,000 in any 12 consecutive months, provided that the person making the disposals shall render appropriate returns to the Service on an annual basis; or
  3. The shares are transferred between an approved Borrower and Lender in a Regulated Securities Lending Transaction (RSLT) as defined in the Companies Income Tax Act.

Legal Basis

  1. Section 2 Finance Act, 2021.


Though the exemption granted under the CGTA still stands with relation to gains from disposal of Nigerian Government Securities, CGT is however chargeable on gains derived from the disposal of other Nigerian company’s securities except where any of the three scenarios stated above applies.

The chargeable rate of CGT on such gains shall be at 10% and the taxpaying public is hereby notified of this new development.

All parties involved in such transactions are expected to comply with the law by including such gain in their annual income tax returns and pay taxes due therefrom.

Compliance Requirements

1. Filing of Returns.

In line with Section 50 of the Personal Income Tax Act, 2004 (as amended) (PITA), all Stockbrokers and other Capital Market Operators are hereby appointed as agent to Lagos State Internal Revenue Service for the purpose of filing returns on transactions involving individuals and non-incorporated entities in the Capital Market. The so-appointed agents are required to file returns biannually (June and December every year) in line with Appendix A of this Public Notice through our e-Tax platform, with the link

Individuals and non-corporate entities that make disposal of shares in any year of assessment are to file annual returns on or before 31 March in the following year in the prescribed format as provided in Appendix B of this Public Notice.

2. Payment of Tax

Anybody liable to tax under PITA, with Lagos State as his/her permanent place of resident in any year of assessment shall upon disposal of shares in any Nigerian Company compute the tax on the gains therefrom and remit same to LIRS through our e-Tax platform, with the link not later than 30 days of making such disposal, except where:

The proceed is below N 100,000,000; or

The proceed is to be reinvested in the same year; or

The transfer is between a borrower and lender in an RSLT.


Description automatically generated

Related items.

Get the App

apple-store  play-store

Connect with us

Proshare is a professional practice focused on delivering research and information services to bridge the gap between investors and markets; by delivery on credible, reliable, and timely engagements through the following areas — Impact Research, Market Intelligence, Strategic Advisory, Stakeholder Relations & Digital Media.