Effect Of Tax Incentives On Investment Drive In Southwest Nigeria

International Journal of Economics and Management Studies

© 2019 by SSRG - IJEMS Journal

Volume 6 Issue 5

Year of Publication : 2019

Authors : Clement Olatunji OLAOYE & Mayowa Oyeronke MALOMO

10.14445/23939125/IJEMS-V6I5P103

How to Cite?

Clement Olatunji OLAOYE & Mayowa Oyeronke MALOMO, "Effect Of Tax Incentives On Investment Drive In Southwest Nigeria," SSRG International Journal of Economics and Management Studies, vol. 6,  no. 5, pp. 12-17, 2019. Crossref, https://doi.org/10.14445/23939125/IJEMS-V6I5P103

Abstract:

This study examined effect of tax incentives on investment drive in Southwest Nigeria. Specifically the study evaluate the effect of capital allowance, pioneer relief, rural investment allowance and investment tax credit on investment drive in selected manufacturing firms in Southwest Nigeria. Primary source of data collection was employed and sourced through a structured questionnaire administered to the staff (Senior and Middle) of selected manufacturing firms in Southwest Nigeria. Data were analyzed using both descriptive and inferential statistics. Descriptive analyses conducted in the study include frequency table, and pie chart while inferential analyses conducted in the study include linear regression and ANOVA analysis. F.test was used to test the overall significance of the regression model while the coefficient of determinant R2, was used to determine how much variation the dependent variable (investment drive) was explained by independent variable (capital allowance, pioneer relief, rural investment allowance and investment tax credit). Result revealed that coefficient of determination (r2) of capital allowance, Pioneer relief, rural investment allowances and Investment tax credit were 0.346, 0.167, 0.433 and 0.730 which implies that about 34.6%, 16.7%, 43.3% and 73% variation in investment drive of the selected manufacturing firms can be explained by capital allowance, Pioneer relief, rural investment allowances and Investment tax credit in individual firms. The study found out that capital allowance, rural investment allowances and Investment tax credit indicated positive and significant effect on investment drive in Southwest Nigeria, (0.325, p <0.05), (0.658, p<0.05) and (0.854, p< 0.05) respectively, while pioneer relief indicated negative and insignificant effect on investment drive in Southwest Nigeria (-.042, p >0.05). The study concluded that capital allowance, rural investment allowances and Investment tax credit has increased investment drive in Southwest Nigeria, while pioneer relief has negative effect.

Keywords:

Tax Incentives, Investment Drive, Capital allowance, Pioneer relief, Rural investment allowances, Investment tax credit

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