The Impact of Capital Gains Tax on Investment, Social and Economic Development in Nigeria

Osho, Augustine E., Ajibola, Isaac Olushola, Omolola, Ramat Abiodun


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

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