Tax Incentives and Investment Performance of Listed Non-Financial Companies in Nigeria

Abstract

This study examined the relationship between investment allowance, tax exemption and investment performance of listed non-financial companies in Nigeria. The study adopted ex-post facto research design. The population comprised of 110 listed non-financial companies in Nigeria as at 31st December, 2020. The sample included twenty listed non-financial companies in Nigeria which were selected based on specified criteria. Data for the research work were sourced from the published financial statements of the sampled companies as well as from the Central Bank of Nigeria (CBN) annual bulletin including the World Bank Development Indicators Database. Based on the empirical results, tax exemption has a positive significant relationship with investment performance of   listed non-financial companies in Nigeria. On the other hand, investment allowance shows a positive but insignificant relationship with investment performance of listed non-financial companies in Nigeria. The study concluded that tax incentives have a positive significant relationship with investment performance of listed non-financial companies in Nigeria. This result is supported by the agency theory. The study recommended that managers of the sampled companies should intensify their efforts in the area of gaining more tax exemptions from the relevant tax authorities. This is because increased exemptions from tax may cause significant improvement in the investment performance of listed non-financial companies in Nigeria. This would motivate companies to invest into products and services that are innovative and could lead to inventing new ideas and strategies that may lead to the creation of new and improved goods and services that will contribute towards solving the ever evolving and dynamic customer taste and preference.