Tax Incentive Practices and Financial Performance of Listed Consumer Goods Firms in Nigeria

Abstract

Tax incentives are granted to enhance positive financial performance and growth of companies across various industries in the country. It is also encouraging to know that consumer goods companies are ranked as one of the pioneer companies. There is however some air of uncertainties as to the value or rationale behind the continued provision of tax incentives. The study examined the relationship between tax incentive practices and financial performance of listed consumer goods firms in Nigeria. The specific objective was to investigate the relationships between annual allowance and return on assets. Secondary data was obtained from the annual reports of) consumer goods firms listed on the Nigeria Exchange Group (NEG) Fact book on a time series of 2011-2020. Convenience sampling technique was adopted where 5 listed consumer goods were selected. Data sourced were subjected to a battery of robustness test, while Pearson’s Product Moment (PPMC), Partial Correlation and Regression analysis used for data analysis and testing the hypothesis formulated. The study result indicated that there is a significant relationship between Annual Allowance and Return of Assets of listed consumer goods in Nigeria. The study recommended that the authorities responsible for administration of tax incentives should prioritize the process of granting tax incentives by making it easier for companies in the consumer goods have unrestrained access to tax incentives, so as to bolster productivity in the sector in order to promote made in Nigeria goods.