APPRAISAL OF THE PROBLEMS AND PROSPECTS OF CAPITAL GAINS TAX ACT, 2004 IN NIGERIA

APPRAISAL OF THE PROBLEMS AND PROSPECTS OF CAPITAL GAINS TAX ACT, 2004 IN NIGERIA

BACKGROUND OF THE STUDY

The topic An Appraisal of the Problems and Prospects of Capital Gains Tax Act, 2004 in Nigeria is a topic that will try as much as it can to critically analyze the essential provisions of the Act1 and identify the problems and prospects associated with the Act. First and foremost, it is pertinent to note at this juncture that the Act deals with the taxation of capital gains. Capital gain is the excess of the sales proceeds of asset such as land, building, stocks, equipment, etc over the original cost of that asset.2 It is the view of some authors that capital gain occurs when ownership changes through the process of exchange or sale or when the owner diverts himself or herself of his/her rights in the property.3 However, Ayua is of the view that capital gain results from increases in the market value of assets to a person who does not regularly offer them for sale and in whose hands they do not constitute stock-in-trade. To him, capital gains may be „paper gains‟ where the assets appreciate in value while still in the hands of the owner.4 According to him, disposal is not necessary.

Revenue generation, equity in the payment of tax and economic growth have been identified as the reasons for the promulgation of the Act.5 The persons chargeable to capital gains tax are companies throughout Nigeria and persons to whom the Income Tax (Armed Forces and other Persons) Special Provision Act applies. The rate of capital gains tax is fixed at 10% of the chargeable gains after making certain deductions allowed by the Act.

The capital gains tax was introduced into Nigeria by the Capital Gains Tax Decree, 1967 (Decree No. 44) which was re-enacted in Cap. 42 of the Laws of the Federation of Nigeria 1990.6 The Decree was enacted on the 19th day of October, 1967 but retrospectively deemed to have taken effect from 1st April, 1967. The Act resembles Capital Gains Tax Law of United Kingdom.7

The Federal Board of Inland Revenue (F.B.I.R) through its operational arm, Federal Inland Revenue Service (F.I.R.S) collects Capital gains tax of companies, non-residents and residents in FCT whereas State Inland Revenue Boards collect such tax from individuals who reside in their states. By s. 43, C.G.T.A, 2004, the Act is administered by F.B.I.R and appeal against any assessment shall lie to Appeal Commissioners.

TOPIC: APPRAISAL OF THE PROBLEMS AND PROSPECTS OF CAPITAL GAINS TAX ACT, 2004 IN NIGERIA

Chapters: 1 - 5
Delivery: Email

Number of Pages: 80

Price: 3000 NGN

In Stock

Buy the Complete Material Now