THE ASSESSMENT OF CAPITAL GAIN TAX ADMINISTRATION IN NIGERIA (A CASE STUDY OF FEDERAL INLAND REVENUE SERVICE)

          ABSTRACT

Tax is a compulsory levy imposed by the government on the income or profit of the 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, and also the introduction of VAID to the tax payer for effective administration of capital gain tax in Nigeria.

TABLE OF CONTENT

Title page ………………………………………………………………………. i

Certification……………………………………………………………………..ii

Approval page ………………………………………………………………….iii

Dedication ………………………………………………………………………iv

Acknowledgement ……………………………………………………………..v

Abstract ………………………………………………………………………....vi

Table of content…………………….…………………………………………vii

List of table ……  Chapter one ……

Chapter two ……

Chapter three ……

Chapter four ……

Chapter five ……

Reference ……

Appendix ……

Questionnaire ……

CHAPTER ONE

Introduction

1.1    background of the study……………………………………………….1

1.2    Statements of problems ……………………………………………….5

1.3    Objective of the study ………………………………………………….8

1.4    Significance of the study ………………………………………………9

1.5    scope and limitation of the study ………………………………….10

1.6    Research question/Hypothesis …………………………………….11

1.7    Definition of terms …………………………………………………….13

CHAPTER TWO

2.0      Literature review …………………………………………………....15

2.1      Capital gains tax administration and application……………..15

2.1.1   Principles of Taxation ………………………………………………17

2.1.2   Characteristics of a Good Tax System ………………………….18

2.1.3   Why taxes are imposed…………………………………………….18

2.1.4   Offences and penalties …………………………………………….19

2.1.5   Reasons for poor performance of capital gain tax in Nigeria..20

2.1.6   Need for effective capital gain tax revenue in Nigeria………..22

2.2   Theoretical Framework ………………………………………….. .22

CHAPTER THREE

RESEARCH METHODOLOGY ………………………………………………25

Research design ……………………………………………………….25

Population of study ……………………………………………………25

The sample and sampling techniques …………………………….25

Sources of data collection ……………………………………………28

Nature and administration of instruments for data collection...28

Validation of the instruments ……………………………………….29

Method of data analysis ……………………………………………..29

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS 

Data presentation ……………………………………………………..31

Analysis of data ……………………………………………………….34

Test of hypothesis …………………………………………………….35

Discussion of findings ………………………………………………..42

CHAPTER FIVE

Summary ………………………………………………………………..43

Conclusion ………………………………………………………………43

Recommendations …………………………………………………….44

Suggestions for further studies……………………………………..44

References ………………………………………………………………46

Appendix ………………………………………………………………..48

Questionnaire ………………………………………………………….49