ASSESSING THE RELATIONSHIP BETWEEN TAX INCENTIVES AND PERFORMANCE OF LISTED AGRICULTURAL FIRMS IN NIGERIA
Keywords:
tax incentives; tax holiday; annual allowance; investment tax allowance; tax rate reduction; loss relief; return on assets; agricultural firms; Nigeria.Abstract
This study examines the effect of tax incentives on the performance of listed agricultural firms in Nigeria. Specifically, it evaluates the effects of tax holiday, annual allowance, investment tax allowance, tax rate reduction and loss relief on return on assets (ROA). An ex-post facto design was employed using secondary data extracted from the audited financial statements of the five agricultural firms listed on the Nigeria Exchange Group over 2013–2023. A census approach was adopted because the population comprised five firms. Multiple regression analysis was performed using SPSS version 23. The results indicate that tax holiday and annual allowance have positive and statistically significant effects on ROA, whereas investment tax allowance and tax rate reduction have negative and statistically insignificant effects. Loss relief has a negative and statistically significant effect on ROA. The findings suggest that the effectiveness of tax incentives is heterogeneous: incentives that directly reduce current tax burdens or support the recovery of qualifying asset costs appear more closely associated with firm performance than investment allowance, tax-rate reductions and loss relief in the observed sample. The study concludes that tax-incentive policy for listed agricultural firms should be more targeted, transparent and performance-oriented, with particular attention to tax holidays and annual allowances and a review of the administration of investment and loss-related incentives.References
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