4.2019

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http://10.150.1.119/handle/123456789/2621

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Browsing 4.2019 by Subject "Corporate Income Tax"

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    Effects of tax incentives on profitability of millers in Kenya: a case study of Unga Group Limited
    (KESRA/JKUAT - Unpublished research project, 2019) Abdullahi, Kolo
    Taxation rate and any existing incentives in a given country is a key determinant for economic development as any investor ought to know the viability of the investment prior to committing any resources to the endeavour. The purpose of the study was to determine the effect of tax incentives on profitability of Millers in Kenya. The study was guided by the following specific objectives; to determine the extent to which custom & excise tax incentives affects the profitability of firms, to establish the extent to which VAT incentives affects the profitability of firms and to determine the extent to which corporate income tax incentives affects the profitability of Kenyan Millers. The study utilized descriptive research design where the nature of the main data for the study was quantitative and was collected through questionnaire. The target population was Unga group limited and the sample size will be 20 respondents. Data was analyzed by use of SPSS-Version 20.0 and findings presented in the form of tables. From the findings it was revealed that custom & excise tax incentives, VAT incentives and corporate income tax incentives affected the Kenya Millers profitability significantly. Correspondingly, it was revealed that if there were no tax incentive for Kenya Millers, the firms will be operating at a loss. The finding further revealed that custom & excise tax incentives had negative effect on profitability while VAT incentives and corporate income tax incentives had positive effect on Millers profitability. The study recommends that the government should absorb the cost of electricity & fuel to the tune of the foregone duty on imports and VAT exemptions on imported raw materials in order to make the incentives of custom and excise duty as well as VAT more viable. The study further recommends that, Kenya manufacturing sector should adopt technology to improve the quality of their output to attain sustainable local and export market competitiveness and minimize dependency on government protection.
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    Tax incentives and flow of foreign direct investment of manufacturing firms in Kenya.
    (KESRA/JKUAT - Unpublished research project, 2019) Musyoki, Grace Mwikali
    The manufacturing sector in Kenya is key to unlocking the country’s economic potential. As part of the Big Four Agenda, there are several incentives that have been initiated by the government to encourage investment in the sector. However, there has been inconclusive empirical data indicating how foreign incentives influence the quantity of foreign direct investment geared towards the manufacturing sector in Kenya. This study sought to examine this gap. The study specifically sought to examine how investment deductions, 10-year corporate income tax holiday and 10-year withholding tax influence foreign direct investment in Kenya. Optimal tax theory, the expediency theory and the theory of investment form the basis of this study. A descriptive design was adopted with the study’s population comprising 65 Kenyan-based EPZ firms. The data used in the study was obtained from the annual reports of the manufacturing firms and KNBS data for the period 2013-2018. Data analysis involved descriptive statistical techniques while inferential analysis was helpful in determining the effect of tax incentives on the flow of foreign direct investment in the manufacturing sector. The research indicated there is positive relationship between tax incentives and foreign direct investment within EPZ firms in Kenya. The findings indicated that a unit change in investment deduction will result in a .017-unit change in foreign direct investment; unit change in 10-year withholding tax will result in a .042-unit change in foreign direct and a unit change in 10-year corporate tax will result in a .032-unit change in foreign direct investment. The research recommends that the government should conduct a review of all tax incentives offered in order to foster the implementation of the corporate tax, the withholding tax and investment deductions.