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Fiscal Incentives and Tax Compliance Behaviour in Industrial Clusters: A Survey of Clusters in South-East Nigeria

Author

Listed:
  • Ebele S. Nwokoye

    (Nnamdi Azikiwe University Awka, Nigeria)

  • Clement I. Igbanugo

    (University of Benin, Nigeria)

  • Chukwunonso Ekesiobi

    (Chukwuemeka Odumegwu Ojukwu University, Nigeria)

  • Stephen K. Dimnwobi

    (Nnamdi Azikiwe University Awka, Nigeria)

Abstract

The study investigates the impact of fiscal incentives on the tax compliance behaviour of firms in industrial clusters in Nigeria. Data from 800 firms drawn from three industrial clusters in South-East Nigeria were collected using a structured questionnaire through a multi-stage sampling procedure. Descriptive statistics and the logistic regression model were applied to estimate the survey responses. The major findings of the study show that regular tax audit, firm size, simplifying the communication on tax requirement, communicating deterrent messages, educational attainment of the firm owner and political legitimacy of the current government as well as fiscal incentives (tax credit, tax reduction, capital allowance, investment incentives) significantly influence the tax compliance behaviour of firms in Nigeria’s industrial clusters. Similarly, the study finds that fiscal incentives significantly enhance firm performance in Nigeria’s industrial clusters. Implications and policy suggestions are presented for adoption by concerned stakeholders in the tax and industrial sectors.

Suggested Citation

  • Ebele S. Nwokoye & Clement I. Igbanugo & Chukwunonso Ekesiobi & Stephen K. Dimnwobi, 2022. "Fiscal Incentives and Tax Compliance Behaviour in Industrial Clusters: A Survey of Clusters in South-East Nigeria," Working Papers of the African Governance and Development Institute. 22/008, African Governance and Development Institute..
    • Handle: RePEc:agd:wpaper:22/008
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    References listed on IDEAS

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    Cited by:

    1. Dimnwobi, Stephen Kelechi & Madichie, Chekwube V. & Ekesiobi, Chukwunonso & Asongu, Simplice A., 2022. "Financial development and renewable energy consumption in Nigeria," Renewable Energy, Elsevier, vol. 192(C), pages 668-677.
    2. Uju Regina Ezenekwe & Eze A. Eze & Geraldine Ejiaka Nzeribe & Maria Chinecherem Uzonwanne, 2023. "Winning the Environmental Sustainability Crusade: Do Agricultural Development and Public Debt Mitigate Environmental Pollution in Nigeria?," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(9), pages 1481-1497, September.
    3. Hoang, Thon T.C. & Nguyen, Dung T.K., 2023. "Women’s representation in parliament and tax mobilization," MPRA Paper 118367, University Library of Munich, Germany, revised 24 Aug 2023.

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    Keywords

    Fiscal incentive; Tax compliance; Industrial Cluster; Nigeria;
    All these keywords.

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