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Tax Incentives Catalyst For Industrial Development And Economic Growth
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1.2 STATEMENT OF PROBLEM
Empirical studies have shown different views
on tax incentives as a catalyst for economic growth and industrial
development. A school of thought believes that a tax incentive
encourages economic growth and industrial development while another
believes that it reduces revenue accruable to the government. As a
result of this, it does not stimulate the economy. The poverty
alleviation programme aimed at reducing the rate of poverty among the
masses, was introduced. This programme covered the provision of jobs for
able and unemployed youths, provision of loans for small and medium
scale enterprises at a minimum lending rate. With all these measures and
policies taken so far, the economy has not shown any appreciable
progress and Nigeria still remains one of the developing nations of the
world. Given this gap, this study seeks to examine the nature of tax
incentives that are extended to deserving companies and the interaction
that exists between the tax incentives and the company.
Tax
incentives as a catalyst for industrial development and economic growth
in Nigeria using selected industries and firms in Portharcourt, Rivers
state is that on which the basis are formed although, many advantages to
tax incentives are that they are used for industrial development and
economic growth. But, most tax experts, consultants, Individuals and
economic analysts ignored or criticized the incentive for the following
reasons:
1. That the impacts of the incentives are not effective in the economy.
2. That the exemption privilege not granted to al firms places some companies at a competitive advantage over others.
3. That the incentive granted are not adequate for developmental and industrial growth.
4. Most management of firms, companies and industries lack the awareness of the incentive.
5. The unwillingness of some companies and individuals to claim the incentive because they do not understand the role of such.
1.3 PURPOSE OF THE STUDY
Tax
incentive is a strong fiscal measure or policy which can stimulate
investment and savings leading to capital formation thereby enhancing
industrial growth and economic development. This capital acquisition can
be used positively in economic and industrial development of companies
and could be of individual effective usage in self development. In
deciding if these incentives can stimulate the companies and individuals
to invest in the economy, one basic fact to be checked is if the
company or industry concerned decided to go into business because of the
incentive offered.
For this purpose, the researcher intends to
examine the criteria for deserving tax incentives, unfold how the
industries and firms have been responding to the provision of the
incentives scheme, assess the implication of the tax incentives,
ascertain how these incentives have been stimulating and motivating
these bodies to establish industries and firms which will in turn create
employment opportunities thereby stimulating industrial development and
economic growth.
Furthermore, the researcher intends to examine how
this scheme has helped existing industries and firms in expanding their
areas of operation in Portharcourt, Rivers State.
RESEARCH QUESTIONS
1. Can these tax incentives attract foreign investors to Nigeria?
2. Are the existing tax incentives adequate for industrial development and economic growth?
3. Are these incentives claimable by companies?
4.
Do these incentives stimulate individuals to establish new enterprises
which will boost industrial development and economic growth?
5. Do these tax incentives induce the existing industries to pursue vigorous expansionary policies?
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