Effect of Tax Incentives on Investment Growth in Nigeria
Keywords:
Tax Incentives, Investment Growth, Tax Credit, Private Investment, Foreign Direct InvestmentAbstract
This study investigates the effect of tax incentives on investment growth in Nigeria. It focuses on Tax Credit (TAC) as a form of tax incentives. The research employs an ex-post facto research method by using a dataset encompassing measures of Private Investment (PIN), and Foreign Direct Investment (FDI). Descriptive statistics, Correlation, one sample and regression analyses are used to assess the significance of tax incentives on these investment types. The findings reveal a positive and significant effect of tax credits on all investment categories. TAC has strong correlationson both PIN (r = 0.813, p < 0.01) and FDI (r = 0.895, p < 0.01). This studyconcludes that tax credits are effective in stimulating both domestic and foreign investment in Nigeria highlighting their role as a vital policy tool for enhancing capital formation and economic growth.Policymakers are therefore encouragedto design and maintainawell-structured tax credit scheme that will significantly enhance various forms of investment, ultimately supporting broader economic objectives.
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