₦airaland Forum

KarlTom:
Thank you...

you suddenly 'know' the part that suit me

KarlTom:
I stand to be corrected but Let me quote your original post:

B. On Capital Gains from Shares
• Threshold Exemption: No tax if BOTH apply in a 12-month period:
o Total sale proceeds < ₦150m, AND
o Chargeable gains < ₦10m.

the key word here is BOTH so exemption only happens WHEN both conditions are met

Did you just take the part that suited you and leave out the rest of section B? Maybe you’re right, maybe not…

B. On Capital Gains from Shares
• Threshold Exemption: No tax if BOTH apply in a 12-month period:
o Total sale proceeds < ₦150m, AND
o Chargeable gains < ₦10m.

• Reinvestment Rule: Reinvesting sale proceeds (within the same tax year) into Nigerian shares reduces taxable gain. Only the non-reinvested portion is taxable.

• Deduct Costs: Always deduct brokerage fees and other disposal-related expenses.

KarlTom:
There's a cap of total sales (₦150m)

if your stock sales exceed N150,000,000 but you reinvest all the proceeds within the same tax year, you will generally not pay any capital gains tax on those gains, according to the Nigeria Tax Act, 2025.

mikeapollo:
Okay. I get the dividends side.
I am only concerned with the tax on gains. What happens when I sell and incur losses; any concessions or credits from govt for losses?
I think this could make people sell their huge gains (and cash out) in December, then wait and see how the tax operates in 2026 before they re-enter the market.

What about reinvestment in the fixed income market i.e. selling shares and using proceeds to buy bonds or T bills? Will that be considered in lieu of reinvestment in the NGX?

1. Taxation of Capital Gains and Losses
• What is taxable?
Profits (gains) from selling chargeable assets (including shares, options, and rights) are taxable.
These gains form part of your total income and are taxed at normal personal income tax rates.

• What if you make a loss instead?
Yes — the Act allows you to deduct capital losses from your taxable income:

1. Deductible Losses
Losses from selling shares can reduce your taxable income.
2. Carry Forward
If you can’t use all the loss in the same year, you can carry it forward and offset it against profits in future years until the loss is fully used.
3. Limits
You can never deduct more than the actual loss you suffered.
4. Special Rule for Digital Assets
Losses from crypto or digital assets can only be used to offset profits from other digital asset trades. (Shares don’t have this restriction — they can offset broader taxable income.)

Bottom line: If you lose money on shares, you can carry that loss forward to reduce future tax bills.
________________________________________
2. What About Bonds or T-Bills?
• Not covered by the relief.
• The Act is very specific: reinvestment relief only applies if proceeds go into shares of Nigerian companies.
• Bonds and Treasury Bills are treated as “securities” (debt instruments), not equity.

So, if you sell shares and move the money into bonds or T-Bills, you lose the reinvestment benefit and your capital gain is fully taxable.

Streetinvestor2:
Traders and jijo people that pull fund out go reduce. Na Agba go hear the thing pass as he buys in November and sell the next yr to pull his loot.The government will collect 25% from the money (gain)
Or he go chop watery beans with male girl fnds..lol

mikeapollo:
Thanks for this.
Would these taxes not affect the NGX negatively, to the benefit of the fixed income market?
I cannot imagine paying such taxes on my gains in NGX when T. Bills and Bonds would only cost me WHT at 10%.
Or am I missing something?

If you reinvest your loot within the same year, you pay nothing — tax is charged only on what you withdraw. I think this will actually work in favor of the NGX rather than against it, as people will think twice before pulling funds out. As for dividends, you already pay tax in the form of withholding tax (WHT).

Taxation for Investors and Traders in the Nigerian Stock Market (2026)
As a resident individual in Nigeria, dividends and capital gains from stocks are taxed under the Nigeria Tax Act, 2025. Here’s how it works, and strategies to legally reduce your tax burden.
________________________________________
1. Tax on Dividends
• What counts as dividends?
Any distribution by a Nigerian company before deductions (gross amount).

• How are dividends taxed?
They are treated as part of your total income and taxed at the individual income tax rates:

Tax Band (₦) Rate
First 800,000 0%
Next 2,200,000 15%
Next 9,000,000 18%
Next 13,000,000 21%
Next 25,000,000 23%
Above 50,000,000 25%

• Tax already deducted at source?
If dividends fall under Section 51 (final withholding tax), then the deduction at source is final, and you don’t need to include them in your income tax return. Otherwise, they are part of your assessable income.
________________________________________
2. Tax on Capital Gains (Share Sales)
• What is taxed?
Profit from selling shares, options, or rights.
Formula: Sale Proceeds – (Acquisition Cost + Disposal Costs) = Chargeable Gain.
• Tax rate: Same individual income tax rates as above.
________________________________________
3. How to Reduce Your Tax Burden
A. On Dividends
• Authorized Collective Investment Schemes (CIS): Dividends from CIS are tax-exempt.
• Export-Oriented Businesses: Dividends from these businesses are tax-exempt.
• Real Estate Investment Companies (REITs):
o REIT income itself is exempt if 75% is distributed within 12 months.
o However, once you receive the dividend from the REIT, you are taxed at normal income tax rates.

• Foreign Dividends: Dividends brought into Nigeria through approved channels are exempt.

B. On Capital Gains from Shares
• Threshold Exemption: No tax if BOTH apply in a 12-month period:
o Total sale proceeds < ₦150m, AND
o Chargeable gains < ₦10m.

• Reinvestment Rule: Reinvesting sale proceeds (within the same tax year) into Nigerian shares reduces taxable gain. Only the non-reinvested portion is taxable.

• Deduct Costs: Always deduct brokerage fees and other disposal-related expenses.

C. General Individual Deductions
(These reduce your total taxable income):
• National Housing Fund (NHF) contributions.
• National Health Insurance Scheme (NHIS) contributions.
• Pension contributions under the Pension Reform Act.
• Interest on loans for an owner-occupied home.
• Life insurance or annuity premiums (for you or your spouse).
• Rent relief: 20% of annual rent (max ₦500,000) with proper documentation.
________________________________________
4. Key Considerations
• Record Keeping: Keep details of share purchases, sales, costs, and dividends received.
• Compliance: File returns even if your income is exempt.
• Seek Professional Advice: Tax rules can be complex and exemptions depend on your specific case.

courage89:
Interesting analysis. Thanks for sharing

I doubt they’ll be able to maintain similar payout ratio. The #2.5 Naira (3.2 billion Naira) for 2024 fy represents about ~28% payout ratio of their 11 billion Naira PAT. Also, that was based on lower outstanding shares, pre- 5 for 1 bonus. 2025 fy outstanding shares will rise to 12.7 billion as you rightly highlighted. Half year net income was 5 billion Naira. Assuming they double that, that should put their net income at 11 billion Naira (EPS of ~1.4 Naira).

Assuming a high payout ratio of 50%, that’s about 0.7Naira (7% yield at 10 Naira share price).

I do agree, the company is undervalue based on book value.

You are very right — the total dividend payout in 2024 was ₦3.17 billion (not my earlier ₦19 billion calculation based on the post 5-for-1 bonus). It was shared before the 5-for-1 bonus.

That revises my final value calculation, based on your estimated ₦0.70 per share, down to ₦9.8 (minimum) and ₦18 (maximum). This suggests they may have fairly priced the rights issue at ₦10.

Thank you for your correction. I was in a hurry to calculate without pulling the available initial data. This is why this forum is invaluable. Thanks again.

VFD Group’s Q1 results showed great improvement, yet the share price kept falling. I think this is the time to accumulate, assuming they maintain the same total dividend payout: ₦2.50 per share × 7,601,094,600 shares = ₦19,002,736,500.

After their proposed rights issue of 2 for 3 at ₦10 (is this correct?), I expect to see new shares outstanding of about 12,668,491,000. Dividing ₦19,002,736,500 by 12,668,491,000 gives roughly ₦1.50 per share.

Stay with me: if they maintain (and I actually think they might pay higher) the same total payout ratio, the dividend should come to about ₦1.50 per share (probably more). Here’s where it gets interesting — after running a dividend valuation, I arrive at ₦20 (minimum).

With the current price at ₦12, that’s still a significant upside, even if one doesn’t pick up rights. To me, VFD Group is a solid BUY at ₦12 (or maybe a little lower). Do your DD, and keep in mind it will likely be a gradual climb.

emmaodet:
Hello bro, i am unable to post the link here.

I was banned doing that for 30 mins

Why is that bad bot bent on frustrating you, Brother? Even though you posted a legitimate link, let me avenge you here.

https://research.meristemng.com/reports/category/investment_guide/

GeneralDae:
No problem, I enjoy learning here too. When it comes to local debts, this Government has borrowed so much (around 21 trillion naira) but local debts are less risky because the Government can never run out of naira, the Government literally prints naira but they don’t abuse that power too much else you get a Zimbabwe, Venezuela, Argentina, and even Nigeria (of 2022/2023) who printed way too much at a time. So I think for this reason, it’s good to classify our debts into foreign and local because foreign debts are more risky due to the currency factor and external reserves (offshore) are used for foreign debt servicing mainly.

This Govt has paid some principals or matured debts. They have paid back the Covid loan from the IMF ($3.22 Billion) and would pay back a maturing Eurobond ($1.2 Billion) in November. Most of these principals are not short term and were borrowed over 4 years ago at least.

So from your question, you are trying to seperate net reserves from Gross reserves. Our Gross reserves according to the CBN 2024 report, grew from $3.99 Billion as at December 2023 to $23.19 Billion as at December 2024. Net reserves are reserves free of all those debts, bank swaps and liabilities you wrote about. So the reserves had $23.19 Billion as at end of 2024 which is about 7 months of import cover (IMF says anything above 6 months is good). The net reserves may have grown further this year but we may have to wait for CBN report by end of the year to officially confirm this.

This is enlightening, brother—may I call you that? But it seems you missed my point, so let me rephrase. Are all local debts denominated in Naira? I don’t think so; I may even have proof of this.

My other questions relate to events like those in the attached excerpts.

GeneralDae:
How much foreign debt has this Govt added since 2023? Not up to $3 Billion.

We are currently at $45 Billion from $43 Billion on May 2023.

At thesame time the FX reserve has grown from around $35 Billion on May 2023 to $41 Billion today.

Very interesting observation—kudos to you. You know me, I easily get confused, and I have more doubts. I’m sure your data can be corroborated, but is dividing debt into foreign and domestic really the best approach? Wouldn’t it be clearer to divide it by denomination—local currency vs. foreign currency? I think (though I’m not sure) that a dollar debt is the same regardless of whether it’s classified as foreign or local. As usual, my understanding may be wrong, so please enlighten me.

One more doubt: I heard that some debts mature based on contingencies—could that also be reflected there? Sorry for the many questions, but I really enjoy learning from you all.

mikeapollo:
Correction: Your are the Professor here, so don't whine me.

I never said naira is the major problem. I only made a comment to the effect that devaluation leads to increased revenue from exports (to support govt expenditure) as a benefit to the govt, as publicly acknowledged by govt spokespersons.
But some of our NSEMPA colleagues said it is never a possibility for devaluation to lead to increased govt revenue. So I had to reference an article to support my point.

People should remember that there is always allocations from the Excess Crude Account which contains dollar receipts from crude exports. However, the money is converted to naira (using the official exchange rate) and shared amongst the various tiers of govt. This is a clear evidence and proof that govt receives more revenue from exports when the currency is devalued.
How the money is used, and whether the benefits reflect in the lives of the people is totally different matter.

Note:
Naira cannot just be printed because that would be currency in circulation not backed by any productive activity or venture.
But some countries do print currency like that in extreme situations. i.e. quantitative easing. In fact, the same Tinubu once advised Buhari to print more naira to spend and support the budget.

I am not in favour of the sharp devaluation of the naira, though, and I have explained that earlier.

Thank you for the compliments, you’re very kind. Let me digest this first, and I’ll come back with more questions when I have new doubts. You’re the man!

Streetinvestor2:
This is exactly what I said
Why celebrate reserve when u are borrowing externally to window dress it and borrowing internal to dress it through sales of government securities eg the dollar bonds.
If the reserve is growing organically it will definitely be rubbing off on naira.
So in another way u can say the government is defending the naira and calling it stability via window dressing.
Abi the thing done pass my pay grade understanding of economic matters

Very Sharp...

Agbalowomeri:
The regime has returned to naira defense.
They are comfortable around $40k. Hopefully, the reserve will rise significantly above that in the second tenure. I expect foreign inflow to slow down next year, preparatory to the 2027 elections

Our astute GeneralDae said that rising treasury levels are a good sign. You people are the best, but I still have my doubts.

Is it possible for treasuries to rise alongside increasing debts? If we consider debt per treasury—similar to how Papa Ema likes to evaluate stocks (debt/equity) when buying—would that give us a clearer perspective?

I feel (though I’m not entirely sure, since these things are sometimes beyond my comprehension) that if treasury reserves are increasing while debts are falling, then maybe we can say the government is doing a great job.

Streetinvestor2:
2 Don't ever buy sound stock shares that is illiquid if u are not planning to hold for yrs..U go hear shaga when u whan leave after the appreciation way u dey see for paper

You raised some wonderful points—you’re really clever. Another smart guy also shared a way to tackle "illiquidity" (or handling heavy buying). According to Sunrisepeable, you buy early based on solid fundamentals, set a target (I think his was 100%), and sell during the euphoria, not after things cool off. You guys are very sharp, and I’m learning so much.

mikeapollo:
There is never only one reason for a major economic policy decision like the sharp devaluation of a currency! There are always a combination of factors. So far, I have not seen the govt/CBN issue a circular to say there is only one primary reason why they devalued the naira. So where do you get the ''primary reason'' from?
Govt officials themselves have come out publicly to say that they see benefits from the devaluation because they get more revenue to support the budget. And you want me to denounce or deny it here in order to please someone's opinion?

My friend, I want to learn from you. You mentioned that devaluation improved the availability of naira—am I correct? If so, does the number of naira notes in circulation increase after devaluation? I’m not sure, but can you actually spend naira outside our country? If naira is the major problem, why can’t more simply be printed?

Also, apart from Government salaries (and not even all of them), what other things can be settled directly or indirectly with naira? Please help me make sense of these doubts in my head.

Back to my bunker..., see you.

Read about Wyckoff, his three laws, and what he says about big money in the market—and broaden your horizon.

Agbalowomeri:
Na only full offers you go get. You will see endless dumping on you

nosa2:
You for leave am make e start the matter na.

Stockhunter:
You sabi am... The market has a way of humbling one. You go just de see offers wey you no expect. Even people wey de sleep go wake up until your 2B finishes and offer still de... Mr market no send o

It is very easy to dismiss and negate an idea—very, very easy. Many stocks would have delivered good returns. Take Ellah Lakes, for example. I saw it when it was at ₦3, dipping every now and then below that level. If I had drawn the line at ₦3, I could have taken any supply below while selling each time it gained 5–10%.

There are many stocks in that category because they had either solid fundamentals or strong speculative hope—not just any random stock. Ellah is not the only one. Go and check the charts and you’ll see a number of stocks that maintained a floor until a rally eventually broke them out to the upside.

Of course, there is risk, but that risk is mitigated through careful selection and by working within a narrow buy-sell window. Anyway, I already know from this thread that you all have one way of thinking, and anything outside that must be considered wrong without critical justification. Please continue—your way is the only viable way.

Agbalowomeri:
The market can remain irrational longer than you can remain solvent.... Duncan Williams

If you had around 2 billion naira (or enough dry powder), you could apply this strategy to a penny stock with strong fundamentals. Many of these stocks only trade a few million a day, so you could place your buy orders just below a set line and queue about 5% above it. You’d absorb all sales below the line, but since the market has both buyers and sellers, you could then sell 5% above until the bulls clear your backlog. It wouldn’t be simple, but with the right stock, I don’t see why it couldn’t work.

I was thinking that someone could easily act as a market maker for some of these penny stocks. I could pick one solid stock, establish a line (when i grow up), and absorb any supply below that line while selling 4–5% above it—essentially providing liquidity. I believe some whales are already doing this on the NGX, judging from the charts.

awesomeJ:
Like with brokers, it's volume that counts.
Bull market, bear market makes no difference.

I want to consistently do 0.1% of the market 😎

There can be POMO when guys announce their 500% looots sha, but understanding compounding helps you realize that 10% a month guarantees 3x increase every year.

Target: N300m for the month!

If I may ask, do you use statistics or technical analysis to choose your entries? How do you handle low liquidity—do you limit yourself to a small subset of highly liquid stocks? This is really cool; I would like to be like you when I grow up.

Streetinvestor2:
Anything #500 and below is great for alhaji with #50 dividend target by yr end

Dangcem, Lol, #40 to #50 div. Is likely.

I’m buying 75,000 units of DangCem tomorrow. I'm dreaming of ₦800. I sold my entire position in total last week. Where’s that guy who tracks Level 2 data? You’ll see the 75k block live tomorrow.

I feel like singing... at the top of my voice.

Sweet melody

uuuuuuuuuuuu

uuuu

Ouu~ouuu~ouuuu

emerem mu gini o

Uuu~ouuu~ouuuu

What is it that they told you?

Telling me how they be following you like oleku

Hmmm~umm, my darling

My darling, emerem mu gini ooo




Is this normal?

awesomeJ:
You make it sound like I'm selling you the app??

Whether Excel or biro and paper, you're free to use what you're comfortable with.

It’s alright, bro. Sorry — it’s actually the best.

awesomeJ:
That's not what maintenance means in the context of software development.

And for my use case, getting a csv from my brokers would be what's needed.


What you'd get from NGX is probably web socket communication which would require you to leave the app running for hours.

That's unnecessary for my use case.


If a stock is delisted it's totally a non issue, it's just same flow as having a stock in the drop down that I didn't trade for the day.

Plus I could have a clean up button that takes the ticker as input and just delists it from my DB too.

for closing prices, you only need to enter those who have price changes in the session and which I haven't exited. Could be 5 or less.


I think you're making way more comments on the app than you have context.

Your context is limited on its functionality as well as my use case.

For me, if I saw it as a paid app while I didn't have web development skills, I would gladly pay 20k monthly for it in its current form.

Okay, I can do all that in an Excel sheet, so I wouldn’t really need it—unless you offer additional functionality.

awesomeJ:
I'll check out those tools when I'm in the mood, for now I'm happy with the functionality.

You probably mean `efforts`? Which isn't a lot at all.

Maintenance is not in context here. The app is stable.

I have a simpler solution to the problem I raised in the last post, though it would require some kind of database or CSV files to store ticker data. You’d likely need some backend code that automatically updates your CSV or database when new data is available, triggered by pressing an 'Update' button in your program.

Here’s how I solved it: I save Morgan’s daily price list—which they send to my email—into a dedicated folder. Then, when the button is pressed, the software reads the latest PDF(or a bunch of pdfs) in the background, scrapes the prices and volume, and updates the CSV or database.

This allows the dropdown to access all available tickers, and any new additions will automatically show up. Prices will also update. It’s a bit rough, but it ensures a more consistent and less error-prone system.

As it stands currently, it’s on par with an Excel sheet.

awesomeJ:
I'll check out those tools when I'm in the mood, for now I'm happy with the functionality.

You probably mean `efforts`? Which isn't a lot at all.

Maintenance is not in context here. The app is stable.

What happens when a company gets delisted or added to the NGX, since you're using a dropdown? Also, to track your performance, you'd have to manually enter current prices, which is prone to errors. That’s the kind of maintenance I’m thinking of.

awesomeJ:
I enter the TICKERS, VOLUMES, SIDES, AND AVERAGE PRICES manually, the rest is automated.

Entering tickers and side is easier since I just use a select list with drop down.

The volumes and average prices, I get from the execution summary page from the brokers' platforms.


Do you think brokers will give me API access??

Cos already this takes out a lot of mental calculations.

And I get historical snapshots of my portfolio for every trading day.

Plus a few other data.

Let me share some screenshots:

It's a good tool, though it still requires a lot of maintenance. The NGX would probably give you access to data for a fee—I think Stock Bubbles is built on top of that. You could host it like Stock Bubbles and allow users to create their own IDs, like Yochaa.

awesomeJ:
If you're an active trader here, I just wrote a nice Flask app that accurately helps with tracking your earnings, cost, portfolio snapshot etc.

I'm so excited about it.

Super light weight too.

Maybe I'll put it in a public repo for anyone who would like to use.

So do you enter the data manually like you would on an Excel sheet, or does it have an API link to a broker? Yochaa comes to mind.