ABSTRACT

The study analyzed the effect of corporate income tax policies on foreign direct investment in Nigeria. The study made use of secondary data which were collected from publications of CBN, National Bureau of Statistics and World Bank database.  The study covered the period 1981-2015. Data were analyzed using descriptive statistics and ordinary least square multiple regression analyses. The finding of the study revealed that statutory tax rate  negatively and significantly influenced foreign direct investment in Nigeria within the study period Effective tax rate positively and significantly influenced foreign direct investment in Nigeria in the long-run and short-run within the study period. The study further revealed that adoption of tax free zone policy in Nigeria positively and significantly influenced foreign direct investment in Nigeria. More so, the adoption of tax haven policy in Nigeria positively and significantly influenced foreign direct investment in Nigeria. This implies that an increase in double taxation avoidance policy, effective tax rate and tax free zone increase foreign direct investment. The study also showed that adoption of double taxation avoidance policy in Nigeria positively and significantly influenced foreign direct investment in Nigeria. The study concluded that corporate income tax policies influenced foreign direct investment in Nigeria between 1981- 2015. The study recommended that there is need for the government to reassess its corporate income tax policies which discourages foreign investors from investing in the country. This can be done by offering 10 years’ tax free investment incentives to foreign investors so as to spur FDI into the country. There is need for Nigerian government to come up with a friendlier economic policies and macroeconomic adjustments that will lead to continuous increase in nation’s GDP through improved infrastructure, economic diversification, political stability and security of life and properties thereby paving way for a friendly business environment that will boost foreign investment in Nigeria.