Tax Incentives Influence On Corporate Earnings: Evidence From Quoted Manufacturing Companies In Nigeria
DOI:
https://doi.org/10.14738/abr.91.9665Keywords:
corporate earnings, tax incentive, manufacturing companies, Nigerian economyAbstract
This study examines the influence of tax incentives on corporate earnings of quoted manufacturing companies in Nigeria. The operational dimension of tax incentives adopted are annual allowance, investment allowance, and tax holiday; while the proxy for corporate earnings is earnings per share (EPS), with share capital as a moderating variable. Secondary data for this study are sourced from financial reports of 69 manufacturing firms quoted on the Nigerian Stock Exchange out of a population of 81 in agriculture, conglomerates, consumer goods, healthcare, industrial goods, natural resources, oil and gas operations. Results from data analysis using descriptive statistics and multiple regression, showed that EPS is influenced by the specified operational dimensions, adjusted R2 = 0.62, p < 0.05. Thus, tax incentives influence corporate earnings in quoted manufacturing companies in Nigeria. It is, therefore, recommended that tax incentives should be sustained by the government to enhance corporate revenue and improve investment. Also, investment booster agencies should do more to coordinate activities, disseminate information on available incentives, and assist investors towards optimum capacity utilization to efficiently drive the Nigerian economy to higher heights.
References
Adams, R.A. (2006). Public Sector Accounting and Finance Made Simple. Corporate Publishers.
Tanzi, V. (2008). The role of the state and public finance in the next generation. OECD Journal of Budgeting, 8(2), 1-27.
Oriakhi, D.E., & Osemwengie, P.K. (2013). Tax incentives and revenue productivity of the Nigerian tax system. International Journal of Development and Economic Sustainability, 1(1), 31-44.
Tennyson, O. (2014). An assessment of agribusiness tax incentives in Nigeria. International Journal of Business and Economic Development, 2(1), 129-137.
Babatunde, S.A. (2012). The impact of tax incentives on foreign direct investment in the oil and gas sector in Nigeria. Journal of Business and Management, 6(1), 1-15.
Omesi, I., & Nwanaka, C. (2016). Multinational transfer pricing and taxation in Nigeria. Enugu State University of Technology Journal of Accountancy, 7(2), 183-188.
Musgrave, R.A., & Musgrave, P.B. (2004). Public Finance in Theory and Practice. Tata McGraw Hill.
Igboyi, L.S. (2012). Principles and Practice of Taxation in Nigeria. Eiwa Ventures Nigeria Limited.
Zubairu, A.D. (2012). Understanding Nigerian Taxation, 1st edition. Hussab Global Press Concept Ltd.
UNCTAD (2003). The Financial Grants to encourage Investment and Employment in Non-Traditional Sectors. New York: UNCTAD.
World Trade Organization (1998). The impact of investment incentives and performance requirements on international trade. Working Group on the Relationship between Trade and Investment. WT/WGTI/W/56. Geneva: Mimeo.
Mason, R., & Knoll, M.S. ((2012). What is tax discrimination? The Yale Law Journal, 121, 1014-1116.
Twesige, D., & Gasheja, F. (2019). Effect of tax incentives on the growth of small and medium-sized enterprises (SMEs) in Rwanda: A case study of SMEs in Nyarugenge District. Journal of Accounting and Taxation, 11(5), 89-98.
Wet, J.H.H., & Toit, E. (2007). Return on equity: a popular, but flawed measure of corporate financial performance. South African Journal of Business Management, 38(1), 59-69.
Talamati, M.R., & Pangemanan, S.S. (2015). The effect of earnings per share (EPS) and return on equity (ROE) on stock price of banking company listed in Indonesia Stock Exchange (IDX) 2010-2014. Journal EMBA, 3(2), 1086-1094.
Chukwu, G. J., & Wadike, G.C. (2018). Lease arrangements and financial performance of breweries in Nigeria. Research Journal of Finance and Accounting, 9(18), 86-93
Yameni, T. (1967). Statistics: An Introductory Analysis. Harper and Row.
Sekaran, U. & Bougie, R. (2009). Research Method for Business. John Wiley and Sons.
Kothari, C. (2014). Research Methodology: Methods and Techniques. New Age International.
Chinwe, A.N., Rotimi, O., & Abdul-Azeez, A.A. (2016). An assessment of the impact of corporate tax incentives on tax compliance in Nigeria. Ideal Journal of Economics and Management Sciences, 2(3), 127-138. 193
Timah, B.P. (2020). Tax Incentive Practices and Financial Performance of Quoted Manufacturing Companies in Nigeria (Unpublished PhD Accounting Thesis), Ignatius Ajuru University of Education, Port Harcourt, Nigeria.
Akinyomi, O. & Tasie, C. (2011). The impact of tax incentives on the performance of small-scale enterprises. Adamawa State University Journal of Accounting Research, 1, 183-188.
Vohra, V. (2014). Using the multiple case study design to decipher contextual leadership behaviors in Indian organizations. Electronic Journal of Business Research Methods, 12, 54-65.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2021 Benson P. Timah, Gospel J. Chukwu
This work is licensed under a Creative Commons Attribution 4.0 International License.
