When one sells his/her stock, does tax apply and how much???
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In Nigeria, when you sell your stocks, tax may apply, but it depends on what type of profit you made. Let me explain clearly: 1. Capital Gains Tax (When You Sell Stocks) Good news first: 👉 Capital Gains Tax (CGT) on stock sales in Nigeria is currently EXEMPT (for listed shares on the Nigerian ExchanRead more
In Nigeria, when you sell your stocks, tax may apply, but it depends on what type of profit you made.
Let me explain clearly:
1. Capital Gains Tax (When You Sell Stocks)
Good news first:
👉 Capital Gains Tax (CGT) on stock sales in Nigeria is currently EXEMPT (for listed shares on the Nigerian Exchange).
This means:
If you buy shares at ₦100,000
Sell at ₦150,000
Your ₦50,000 profit is NOT taxed
This is one reason why many people invest in stocks in Nigeria.
So:
✅ Selling stocks — No tax on profit (for now)
2. But Charges Still Apply When You Sell Stocks
Even though tax may not apply, you still pay transaction charges:
Typical charges when you sell stocks:
Broker commission
SEC fee
NGX fee
VAT
CSCS fee
Total charges are usually around:
👉 About 1.2% – 1.8% of your transaction value
Example
If you sell:
₦100,000 worth of shares
You may pay roughly:
₦1,200 – ₦1,800 as charges
Your broker usually deducts it automatically.
3. Dividend Tax (This One Applies)
This is different from selling stocks.
If a company pays dividend, you pay:
👉 10% Withholding Tax
Example:
Dividend = ₦10,000
Tax (10%) = ₦1,000
You receive = ₦9,000
This tax is automatically deducted — you don’t need to pay manually.
Summary (Very Important)
Situation
Tax Applies?
Selling shares profit
❌ No tax
Dividend payment
✅ 10% tax
Buying/Selling shares
⚠️ Charges apply (not tax)
My Advice as a Beginner
Don’t worry too much about tax when starting.
Focus on:
Buying good companies
Holding long term
Collecting dividends
See lessIn Nigeria, you currently do NOT pay tax on profit from selling shares. Yes… Let that sink in. What Does That Mean? If you: • buy a stock at ₦100 • sell it at ₦150 Your profit = ₦50 ✓ That ₦50 is NOT taxed (capital gains tax does not apply to listed shares in Nigeria under current rules) Let Me ExplRead more
In Nigeria, you currently do NOT pay tax on profit from selling shares.
Yes…
Let that sink in.
What Does That Mean?
If you:
• buy a stock at ₦100
• sell it at ₦150
Your profit = ₦50
✓ That ₦50 is NOT taxed (capital gains tax does not apply to listed shares in Nigeria under current rules)
Let Me Explain With a Simple Story
Mama Ngozi buys tomatoes for ₦10,000.
She sells them for ₦15,000.
Her profit is ₦5,000.
Now imagine nobody collects tax from that ₦5,000.
That is exactly how stock profit currently works in Nigeria.
But Wait… Does That Mean No Charges At All?
No.
There are still transaction charges when you sell.
Oya… Relax Let Me Explain
When you sell shares, small fees are deducted.
These include:
1. Brokerage Fee
Paid to your stockbroker for executing the sale.
2. Exchange Fee
Paid to the Nigerian Exchange market.
3. CSCS Fee
Paid to the Central Securities Clearing System for settlement and record keeping.
So What Actually Leaves Your Money?
Not tax…
✓ but transaction costs
Important Exception You Must Know
Dividends Are Taxed
If you earn:
• dividend income from shares
Then:
✓ 10% withholding tax is deducted automatically
Before the money reaches you.
Let Me Be Honest With You
Many people confuse:
• capital gain (selling profit)
• dividend income
They are not the same.
Simple Breakdown
• Selling shares → No tax
• Earning dividends → 10% tax (already deducted)
Final Truth
You don’t pay tax when you sell shares in Nigeria.
✓ You only pay small transaction fees
Let Me Leave You With This
Before worrying about tax, ask yourself:
• Do I understand how I’m making money?
• Is it from price increase or dividends?
Because once you understand that…
Confusion disappears.
Rose Ejituru
See less