Tax Incentives and growth of listed manufacturing firms in Nigeria

Akingbelure, Olubukunola Ibironke (2019)

xi,77 P

Thesis

This research work analysed the trend of tax reforms and incentives peculiar to the growth of listed manufacturing industries in Nigeria and investigated effect of tax incentives on the growth of the listed manufacturing firms in Nigeria. It also examined relationship of tax incentives on the financial performance of listed manufacturing firms in Nigeria. These were with a view to analysing the impact of tax incentives on the growth of listed manufacturing firms in Nigeria between 2009 and 2016. The study used secondary data. The population for the study consisted of 64 listed manufacturing organizations on the Nigerian Stock Exchange market as at 31 December, 2016. Purposive sampling technique was adopted based on the number of industries whose data were readily available and actively traded in the stock market totalling 20 firms. Data on tax reforms were sourced from Federal Inland Revenue Services documents, tax incentives were sourced from tax returns; growth of firms were sourced from annual financial reports, Nigerian Stock Exchange factbook. Data obtained were analysed using fixed effect and random effect models. The results showed that tax incentives steadily increased in 2009 (60%), 2010 (65%), 2011 (72%) but with sharp decline in 2012 (-22%) and 2013 (-14%) followed by rapid increase in 2014 (52%), 2015 (55%) and 2016 (62%). Also, the result further showed that tax incentives (t = 2.6204, p < 0.05) had significant effect on firms’ growth. Finally, the result showed that tax incentives (t = 2.2079, p < 0.05) had significant positive effect on firms’ performance. The study concluded that tax incentives had a remarkably positive effect on the growth of listed manufacturing firms in Nigeria.