Abstract
The study examined the impact of capital gains tax on investment, social and economic development in Nigeria. Secondary data from the Federal Inland Revenue Service (FIRS) Bulletin and the Central Bank of Nigeria (CBN) Statistical Bulletin for the period 2007 to 2017 were utilized in the study using multiple regression analysis technique and Pearson product moment correlation to measure the relationship between the independent and the dependent variables. Findings revealed that capital gains tax has positive significant impact on investment, social and economic development in Nigeria but the level of significance is quite low. It is therefore recommended that government should increase the capital gains tax (CGT) rate, but not beyond tolerable limit so as to avoid dissention and maximize the revenue accruable to government to boost gross domestic products. Furthermore, government is advised to strive to attain an optimal CGT rate level which should increase revenue to government without negatively affecting CGT. Keywords : Capital Gains Tax; Economic Development, Exchange Rate; Gross Domestic Product, Inflation Rate, Investment, Social DOI : 10.7176/EJBM/11-2-04
Highlights
The Nigerian government embarked on tax drive as part of her several strategies to shore-up her revenue and reduce dependence on oil
5.0 Conclusion The objective of this study is to set out the impact of Capital Gains Tax on Investment, Social and Economic Development of Nigeria
In view of the foregoing, the analysis conducted revealed that there is a positive effect of Capital Gains Tax on investment, social and economic development in Nigeria
Summary
The Nigerian government embarked on tax drive as part of her several strategies to shore-up her revenue and reduce dependence on oil. This came after the country, the biggest economy in Africa slumped into recession. The country since the discovery of crude oil had forsaken other sectors and relied on the ‘black gold’ as her major source of foreign exchange. The negative practice had opened-up the fabrics of the economy to price imbalances and fluctuations in the international oil market, which had impacted on investment, social and economic development. In 2015, the price of crude oil fell to below $30 per barrel throwing the whole economy into recession due to her about 80 per cent dependence
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