Tax Incentives and Financial Performance of Quoted Consumer Goods Manufacturing Companies in Nigeria

Abstract

The study examined the relationship between tax incentives and financial performance of listed consumer goods manufacturing companies in Nigeria.  The study used data collected from published annual reports and accounts of the sampled companies, and tax related submission from the investment promotion commission and Federal Inland Revenue Services.  The study covered only seven companies out of twenty-one (21) listed consumer goods companies in Nigeria which were published with available data for the period of ten (10) years (2014 – 2023). The study used Pearson correlation and multiple regression to establish the influence of tax incentive on financial performance of the sampled firms.  The study found that capital allowance and loss relief had a positive and significant influence on the financial performance of firms while investment allowance had a positive but insignificant influence on the financial performance of the sampled companies.  The study recommends that companies should take more advantage of tax incentives available to them, especially the incentives related to investments that will help in strengthening the productivity of the firms; while tax authorities should consider means of introducing more incentives for investors to critical sectors like consumer goods that have a direct relationship with agricultural output and country export.  Tax authorities should also provide an easy enlightenment mechanism on the importance and advantages of tax incentives, especially the rural investment allowance that is geared towards increase in the provision of social amenities to rural areas among others.