Ogun Seeks Capital Gains Tax Derivation as Industrial Growth Strains Infrastructure
Story: Written by Myra February 18,2026
The Ogun State Government has advanced a legal proposal urging the Federal Government to allocate a derivation fund from Capital Gains Tax to states bearing the brunt of industrial activity, citing mounting infrastructure pressure and environmental costs.
With its fast-growing clusters of factories and manufacturing hubs, Ogun—often described as Nigeria’s industrial nerve centre—argues that heavy haulage linked to production is accelerating wear on roads, bridges, and public assets. The state wants a compensation framework similar to the 13% derivation received by oil-producing states through the Federation Accounts Allocation Committee.
The case was presented at the 2026 budget breakdown and implementation forum in Abeokuta, where the Commissioner for Finance and Chief Economic Adviser, Dapo Okubadejo, said tax reforms should recognise states that absorb the direct costs of revenue-generating activities.
He noted that Ogun has invested heavily to support industrial expansion, delivering over 1,600 kilometres of roads across its 20 local government areas and completing about 4,000 housing units to attract investors and high-income residents, thereby strengthening PAYE receipts.
On the fiscal outlook, Okubadejo disclosed that the 2026 budget rose to ₦1.668 trillion from ₦1.054 trillion in 2025, while the state’s economy expanded from ₦3.5 trillion in 2019 to ₦18.96 trillion in 2026. Internally Generated Revenue also climbed from ₦50 billion in 2019 to ₦240 billion in 2025, with ₦512 billion projected this year.
The Commissioner for Budget and Economic Planning, Olaolu Olabimtan, added that the 2026 budget reflects strong fiscal discipline, citing an 85% execution rate in 2024 and sustained stability. Other officials highlighted gains across roads, healthcare, education, rail extensions, and housing—investments the state says justify a derivation share from capital gains tax.
