Capital Gains Tan in Nigeria

Abstract

Tax is a compulsory levy imposed by the government on the incomes of taxpayers in order to pay the expenses of governance. Capital Gains Tax is a form of tax chargeable on capital gains arising from the disposal of chargeable assets. This paper examines the nature and the justification for Capital Gain Tax as a lucrative ground for raising revenue for development especially in the developing countries. In Nigeria, Capital Gain Tax is yet to yield the desired result in terms of raising revenue for the government. Our theoretical work on this subject explain reasons which includes lack of awareness, inadequate data and the high rate of inflation which has led to high incidence of avoidance of Capital Gain Tax. Arguments against capital gain tax in Nigeria are examined as well as issues, suggestions and recommendations for the effectiveness of this form of taxation. This paper recommends more aggressive awareness campaign, reduction of tax rate and even a merger of capital gain with income tax to reduce cost of collection. Key words: Capital Gains Tax; Government; Nigeria