t Effect of Capital gain tax on the Economic growth of Nigeria:- Ufomba Amarachi Loveth

ABSTRACT

The study investigated the effect ofcapital gain tax on economic growth ofNigeria, from 2008-2018. To achieve this objective, the study specifically investigated the effect of capital gain tax on gross domestic product growth rate ofNigeria (GDPGR), effect of capital gain tax on foreign direct investment ofNigeria (FDI) The study restricted its scope to the period 2008-2018 and data usedfor the study was adoptedfrom the Central bank statistical bulletin websites and the Federal Inland revenue services official websites. The simple regression method was employed as the analytical tool. Findings show that Capital gain tax as the independent variable has a positive and significant effect on the Economic growth of Nigeria, which was proxied with Gross domestic product growth rate andforeign direct investment in Nigeria as the dependent variable. The study recommends that the attitude ofNigerians to taxation should be encouraged to grow into voluntary compliance to tax since it has been proved in this study that capital gains tax and by extension tax revenues has significant positive impact on various indicators of economic growth. The macro economic theory of income flow recognizes that government expenditures are received by the household through the private sector hence the growth in capital gains tax suggests that government incomes also improves the quantum ofgovernment expenditure and economic efficiency. On this basis, this study recommends that citizens are better offpaying their taxes since it will only return to them in double fold; through government expenditures and better conditions of living which the governmentprovides.