You Bought Dangote Refinery Shares. What Tax Will You Pay?

For many Nigerians, this may be their first time buying shares through a public offer. Beyond the subscription price and the possibility of earning returns, there is another part of the investment worth understanding: tax.

Two areas are particularly relevant: dividends and the tax treatment of any gain you make when you eventually sell your shares.

Your dividends will have tax deducted

Owning shares can give you the right to receive dividends if the company declares them. The amount and timing are not guaranteed and depend on the company’s performance, cash requirements and dividend decisions.

If Dangote Refinery declares a dividend, 10% withholding tax applies to dividends paid to shareholders under the Nigeria Tax Act 2025. The tax is deducted at source before the dividend reaches you.

For example, if you were entitled to a ₦100,000 dividend, a 10% withholding tax would mean ₦10,000 is deducted, leaving ₦90,000 to be paid to you.

The treatment can be different for non-resident investors where Nigeria has an applicable Double Taxation Agreement with their country of residence. The specific treaty and the investor’s circumstances determine whether a reduced rate is available.

What happens if you sell your shares for a profit?

This is where the 2026 tax rules become particularly relevant.

Shares are treated as chargeable assets under the Nigeria Tax Act 2025. So, when you eventually dispose of your shares, a gain can potentially be subject to tax.

There is, however, a specific exemption for disposals of shares in Nigerian companies.

Where your total disposal proceeds are below ₦150 million and the chargeable gain does not exceed ₦10 million within any 12 consecutive months, the gain is not chargeable under this provision. Both conditions matter.

The Act also provides relief where the proceeds from the disposal are reinvested within the same year of assessment in shares of the same or another Nigerian company. Where only part of the proceeds is reinvested, tax can apply proportionately to the portion that is not reinvested.

So, buying shares for ₦525 and later selling them at a higher price does not automatically mean you owe tax on the entire amount you receive from the sale. The relevant calculation is based on the chargeable gain, alongside the applicable exemptions and your tax position.

For individuals, chargeable gains are brought into the personal income tax framework rather than being subject to the old standalone 10% capital gains tax rate. Companies are treated under the corporate tax framework.

Keep records from the day you invest

Your IPO documents, subscription records, evidence of payment, allotment details, dividend statements and records of any eventual sale can all help establish what happened with your investment.

This becomes especially useful if you sell your shares later and need to determine the acquisition cost, disposal proceeds and any resulting gain.

The Dangote IPO is currently open, but investors should also remember that SEC approval is not an investment recommendation, and share prices can rise or fall after listing. The SEC has advised prospective investors to use only approved subscription channels and to read the approved prospectus before investing.

For anyone buying Dangote Refinery shares, understanding the tax treatment is part of understanding the investment.

LessaTax helps you keep your income, investment and supporting tax records organised, so you have the documents you need when it is time to account for your taxes.