Owners of chargeable assets like jewelry, buildings, in the Federal Capital Territory, will soon be required to pay a 10 percent capital gain tax on profits made from the disposal of such assets.
This is as the FCT Minister, Nyesom Wike, recently approved the implementation of the Capital Gains Tax, CGT, Act, Cap. CI LFN 2004 (as), to boost the Internally Generated Revenue.
Examples of chargeable assets in Nigeria include jewelleries, buildings, land, patent rights, shares, copy rights, foreign currencies, stocks, debts, among others.
Assets not chargeable to CGT when disposed include gifts, Nigerian currencies, principal private residences, cars, investments held in a personal equity plan, government securities (such as treasury bills, treasury bonds), private residence, gains received in form of retirement benefits, life assurance policies, personal injuries gratuities, loss of office below N10 million and personal properties sold below N1000.
The FCT Administration recently constituted and inaugurated a Capital Gain Tax Implementation Committee to help achieve this mandate in the FCT.
Speaking at the inauguration, the Mandate Secretary, Economic Planning, Revenue Generation and Public Private Partnership, Barr. Chinedum Elechi, explained that to fully harness the potential of CGT in FCT, the minister approved for inter-agency collaboration and synergy between the FCT-IRS and other relevant agencies that would work for smooth implementation of this CGT Act.
According to him, the Act imposes a CGT tax rate of 10percent on the total amount of chargeable gains accruable to any person upon disposal of his/her chargeable asset or assets in a year of assessment after deduction of the allowable expenses from the gains made on the assets disposal and to be remitted to the FCT Internal Revenue Service as required by the extant law.
Stating the terms of reference, the Mandate Secretary charged the committee to conduct comprehensive awareness and education campaigns to improve citizens understanding and also regular stakeholders’ engagement through business associations, chambers of commerce, Nigeria Bar Association and other relevant organisations.
He urged the committee to conduct monitoring of transactions across the stakeholder agencies and enforce the implementation of CGT in accordance with extant laws.
Elechi also enjoin members of the committee to collaborate with judiciary to handle cases of severe non-compliance or fraud as well as establishing transparent dispute resolution mechanism among others.
He said the committee which would be headed by the Executive Chairman FCT-IRS as chairman, Solicitor General, Director, Land Department, Director, Development Control, Director, Abuja Geographic Information System and the Chairman of Nigerian Bar Association as members while the Director, Tax Operations in FCT-IRS would serve as secretary.
Earlier in his remarks, the Acting Executive Chairman, FCT-IRS, Mr. Haruna Abdullahi said CGT is part of tax types the Service is empowered by law to collect but however lamented that only less than 5percent of what is due from capital gain tax is being generated.
Abdullahi expressed joy on the commitment of the FCT minister to bring together relevant stakeholders to work with the Service to enhance the revenue in the territory.