NEXUS BETWEEN TAXATION AND FOREIGN DIRECT INVESTMENT IN NIGERIA

NEXUS BETWEEN TAXATION AND FOREIGN DIRECT INVESTMENT IN NIGERIA

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This paper explored taxation and foreign direct investment (FDI) using the case of Nigeria with limited investigation.Taxation was proxy by company income tax (CITX) and value added tax (VATX), while FDI was proxy by FDI inflows.Data employed for the analyses were from 2000 to 2020 and obtained from Central Bank of Nigeria (CBN) Statistical Bulletins as well as World Development Indicators (WDI).Using wella color touch 77 45 time series econometric technique, the results revealed that CITX has a negative significant impact on FDI.Specifically, this implies that a rise in CITX rate leads to a read more decline in FDI inflow in Nigeria.

We also find that value added tax (VATX) significantly improves FD investment in Nigeria.From the findings, it is recommended that policy makers in the area of corporate tax laws should enact laws that offer incentives to attract FDIs.More than this, government could technically rise the value added tax rate and spend the additional fund from it on human capital training and development for human effectiveness in companies.