IMPACT OF TAX INCENTIVES ON THE ECONOMIC DEVELOPMENT IN NIGERIA

ABSTRACT This study examines the impact of tax incentives on economic development in Nigeria, with a focus on International Brewery Ilesa, Osun State, between 2016 and 2023. The objectives include exploring the relationship between tax incentives and economic growth, assessing the effectiveness of tax incentives in attracting foreign direct investment (FDI), evaluating their impact on indigenous businesses and entrepreneurship, and identifying optimal tax incentive policies for economic development. Adopting diagnostic and explanatory research approaches, data were analyzed using E-View 9.0 statistical software, employing Pearson correlation and regression analysis. The findings reveal mixed outcomes. Investment allowance demonstrates a negative and insignificant impact on economic growth, whereas the control variable, exchange rate, exerts a positive and significant effect. The overall analysis yields a Prob (F-statistic) value of 0.018117, which is below the 0.05 critical threshold, indicating that tax incentives significantly influence Nigeria's economic growth. The study concludes that tax incentives have a measurable impact on economic growth, although their effects vary across different variables. Empirical evidence suggests the need for continuous evaluation of tax incentive programs to optimize their effectiveness. Policy recommendations include conducting periodic assessments and tailoring tax incentives to balance the attraction of FDI and the promotion of indigenous entrepreneurship. These findings highlight the critical role of tax incentives in fostering sustainable economic development in Nigeria