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Fiscal Incentives and Corporate Financing Decisions: Evidence from Firms in Ilala Municipality, Tanzania

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  • Mounia Mohamed
  • Deogratius Dafi
  • Pastory Dickson

Abstract

Corporate financing decisions are central to firms’ sustainability and growth, yet empirical evidence on how fiscal incentives shape capital structure choices in emerging markets remains limited. This study evaluates the effect of fiscal incentives such as tax holidays, tax exemptions, and tax deductions, on corporate financing decisions among firms operating in Ilala Municipality, Tanzania. Guided by the Pecking Order and Trade-Off Theories, the study adopted a cross-sectional research design and collected quantitative data from 181 medium and large firms across manufacturing, banking, telecommunications, and service sectors. Data were analyzed using the General Linear Model (GLM). The findings reveal that tax holidays have a positive and statistically significant effect on corporate financing decisions (β = 0.391, p

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Handle: RePEc:air:journl:v:13:y:2026:i:5:p:616
DOI: 10.22034/ijmae.2026.550528.1869
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