EFFECT OF TAX INCENTIVES ON ECONOMIC ACTIVITIES OF ADAMAWA STATE.

This study investigates the impact of tax incentives on economic activities, particularly focusing on industrial growth and business development in Adamawa State, Nigeria. Tax incentives are widely employed by governments in developing countries as tools to stimulate investment, promote competitiveness, and foster economic growth, though their effectiveness remains debated. The literature review highlights conceptual definitions, types of incentives, and theoretical frameworks such as the Socio-Political and Benefit Received theories, which underpin the understanding of taxation's role in development. Empirical evidence from various studies presents mixed findings on the efficacy of tax incentives in promoting investment, growth, and diversification, often influenced by issues like corruption, policy implementation, and data limitations. The research adopts a descriptive survey methodology, which the research collected data from a sample of 300 .utilizing structured questionnaires to gather data from business owners and stakeholders. Findings indicate a significant positive relationship between awareness and utilization of tax incentives and economic activities. The study concludes that well-designed and effectively communicated tax incentive policies can significantly enhance industrial growth and economic development in Adamawa State, recommending increased awareness campaigns and streamlined processes to maximize benefits.