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Attracting Foreign Direct Investment (FDI) In Nigeria through Effective Tax Policy Incentives

Author

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  • Raphael S. Etim
  • Mfon S. Jeremiah
  • Ofonime O. Jeremiah

Abstract

Amidst the conflicting divides of diverse research findings on the effect of tax policy incentives on Foreign Direct Investment (FDI) in Nigeria, the focus of this study was to confirm the fact. Thus an empirical investigation covering a period of 19 years (1999-2017) was conducted to ascertain the effect of cost-based and profit based tax policy incentives on FDI in Nigeria. In line with the ex post facto research design adopted for the study, secondary data were sourced from CBN bulletins and World Bank Database. Multiple regression techniques was used in analysing the three models that were formulated. The findings revealed that although the cost based tax policy incentives had some relatively stronger effect on FDI (with R2 of .230) compared to profit based tax policy incentives (with R2 of .045), yet there was no significant relationship found between cost based tax policy incentives, profit based tax policy incentives and FDI in Nigeria. It was therefore recommended that non-tax incentive initiatives should be considered as a necessary complement to the tax policy incentives in order to attract and stabilize FDI in Nigeria.

Suggested Citation

  • Raphael S. Etim & Mfon S. Jeremiah & Ofonime O. Jeremiah, 2019. "Attracting Foreign Direct Investment (FDI) In Nigeria through Effective Tax Policy Incentives," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 4(2), pages 36-44.
    • Handle: RePEc:oap:ijaefa:v:4:y:2019:i:2:p:36-44:id:33
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    Citations

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    Cited by:

    1. Seth Nana Kwame Appiah-Kubi & Karel Malec & Joseph Phiri & Mansoor Maitah & Zdeňka Gebeltová & Luboš Smutka & Vojtech Blazek & Kamil Maitah & Jitka Sirohi, 2021. "Impact of Tax Incentives on Foreign Direct Investment: Evidence from Africa," Sustainability, MDPI, vol. 13(15), pages 1-12, August.
    2. Jen-Yao Lee & Ya-Chuan Hsiao & Ngochien Bui & Tien-Thinh Nguyen, 2021. "Inward Foreign Direct Investment and Trade Openness in Vietnam: A Nonlinear Autoregressive Distributed Lag Approach," Economies, MDPI, vol. 9(3), pages 1-18, August.
    3. Eric Amankwaah & Nicholas Mensah & Nana Okyir Baidoo, 2022. "The impact of location tax incentives on the growth of rural economy: evidence from Ghana," Future Business Journal, Springer, vol. 8(1), pages 1-19, December.

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