Effect Of Corporate Income Taxation On Foreign Direct Investment In Nigeria

ABSTRACT

Foreign Direct Investment plays a very important role in the development of the economy. However, it is usually affected by  corporate income tax.    The objective of the study was to ascertain the effect of corporate income  tax on foreign direct investment in Nigeria.  Ex-post facto design was chosen for the research because the researcher made use of data which were already in existence, while secondary data used in the research was derived from Central Bank of Nigeria Statistical Annual Report and Federal Inland Revenue Service Annual Report. Furthermore, Foreign Direct Investment inflow was used as Dependent variable while Petroleum profit tax, Corporate income tax and Education tax were  dependent variables. In addition, Augmented Dickey-Fuller unit root test used in testing time series data showed that it was stationery and integrated at first difference. The study also made use of ordinary least square simple regression  in analyzing the effect of corporate income tax  on foreign direct investment. The result of the study showed that Education tax, company income tax and petroleum profit tax had a significant effect on foreign direct investment. The study therefore recommended that government should ensure that there is effective monitoring on petroleum sector to enhance its revenue. Also policy makers on corporate tax laws should articulate ways to provide incentives to attract foreign direct investment.