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Tax Incentives and Return on Asset of Manufacturing Companies in Southwest, Nigeria: The Moderating effect of Firm Size

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Abstract

Tax incentives have a significant impact on the asset returns of manufacturing companies. Understanding this impact, particularly in the context of Southwest Nigeria, is crucial for policymakers and company executives. Moreover, the moderating role of firm size in this relationship needs to be considered for valuable insights. This study aims to evaluate the impact of tax incentives on the financial performance and asset returns of manufacturing companies in Southwest Nigeria, The study utilized a cross-sectional design and collected data from finance or accounting employees in top management positions of manufacturing companies in Lagos and Oyo States. The collected data was analyzed using statistical techniques, including regression analysis. The results showed that tax incentives, such as capital allowance, investment allowance, corporation allowance, and export promotion allowance, significantly influenced the return on assets of manufacturing companies. Firm size was found to moderate the relationship between tax incentives and financial performance. Based on the findings, recommendations were made, including the need to reconsider the economic value of capital allowance incentives and the importance of considering firm size in tax incentive policies.

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  • Godwin Emmanuel, OYEDOKUN & Mathew, OLAOYE & Titilayo Eni-Itan, FOWOKAN, 2022. "Tax Incentives and Return on Asset of Manufacturing Companies in Southwest, Nigeria: The Moderating effect of Firm Size," Journal of Forensic Accounting & Fraud Investigation (JFAFI), Association of Forensic Accounting Researchers (AFAR), vol. 7(2), pages 41-67, July - De.
    • Handle: RePEc:ris:jfaafi:0063
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