Tax Incentives and Corporate Profitability of Industrial Manufacturing Firms in Nigeria

Authors

  • Etim Osim Etim University of Uyo, Nigeria https://orcid.org/0000-0003-0529-3212
  • Joel Confidence Ihenyen Niger Delta University, Bayelsa State
  • David Johnny Ekanem Ritman University, Ikot Ekpene, Nigeria
  • Usen Paul Umo Akwa Ibom State University, Nigeria
  • Ekwere Raymond Enang University of Uyo, Nigeria

Keywords:

Tax Incentives, Corporate Probability, Industrial Manufacturing Firms

Abstract

The study analysed tax incentives and corporate profitability in Nigeria. It aimed at determining the influence of tax holidays, investment allowances and tax credits on the net profit margin of industrial manufacturing firms in Nigeria. Ex-post-facto design was adopted. Three (3) companies were selected from thirteen (13) industrial manufacturing firms listed on the floor of the Nigerian Exchange Group (NXG) from 2013 to 2023. Ordinary Least Squares (OLS) of the multiple regression models were used to analyze data. The result revealed that Tax Holidays had a positive effect on the Net Profit Margin while Investment Allowance had no statistically significant impact on the Net Profit Margin and Tax Credit had a moderate positive relationship with the Net Profit Margin. Hence, it was concluded that the findings highlight the varying impacts of different tax incentives on firm profitability, with Tax Holidays showing the most significant influence, followed by a moderate effect from Tax Credits, and no impact from Investment Allowance. The researchers recommended that manufacturing firms should participate in policy dialogues and advocacy efforts to influence the design and implementation of tax incentives. Engaging with policymakers can help ensure that the incentives are aligned with industry needs and contribute to sustainable business growth.

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Published

2024-10-14

How to Cite

Etim, E. O., Ihenyen, J. C., Ekanem, D. J., Umo, U. P., & Enang, E. R. (2024). Tax Incentives and Corporate Profitability of Industrial Manufacturing Firms in Nigeria. International Journal of Accounting Intelligence (IJAI), 2(3), 95–120. Retrieved from http://icidr.org.ng/index.php/Ijai/article/view/1702

Issue

Vol. 2 No. 3 (2024): International Journal of Accounting Intelligence

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