Intervening Effect of Corporate Performance on the Relationship between Investment Incentives and Effective Corporate Tax Rate for Manufacturing Firms in Kenya
| dc.contributor.author | Nganyi, Silas Muyela | |
| dc.contributor.author | Koori, Jeremiah | |
| dc.contributor.author | Abdul, Farida | |
| dc.date.accessioned | 2024-10-08T10:00:14Z | |
| dc.date.available | 2024-10-08T10:00:14Z | |
| dc.date.issued | 2024-01 | |
| dc.description | Article | |
| dc.description.abstract | Effective corporate tax rate remain a subject of interest to firms, policy makers and researchers. It measures real level of tax burden imposed by national tax system at firm level. The main problem is how to reduce it at firm level. To address this, government across the world implement various investment incentive framework aimed at lowering effecting corporate tax rate. The intention of low effective corporate tax rate is to influence investments, facilitate capital formation, increase productivity and grow firms. However, effective corporate tax rate in Kenya is still a problem averaging 31.3 percent for the last 10 years and has not been declining towards zero as recommended by the World Bank. Such high effective corporate tax rate militates against desired competitive corporate environment for the manufacturing sector. The manufacturing sector in Kenya has deteriorated to 7.4 percent contribution to gross domestic product which is less than 15 percent as envisaged in Kenya Vision 2030. This undesirable phenomenon therefore prompted the design of this study. The objective of the study was to determine the intervening effect of corporate performance on the relationship between investment incentives and effective corporate tax rate for manufacturing firms in Kenya. The theories underpinning this study were optimal corporate taxation, political power and neoclassical investment. The study adopted positivist philosophy and longitudinal research design. The target population was 1,092 firms registered with Kenya Association of Manufacturers. Stratified random sample of 278 firms provided secondary data for the period 2010 to 2020. Descriptive and inferential statistics were generated using panel data regression analysis. The intervening model was analysed at significance level of 5 percent. The findings established that corporate performance had intervening effect on the relationship between investment incentives and effective corporate tax rate. It was recommended that both the National Treasury and manufacturing firms should have a robust financial framework for monitoring and evaluation of how effective corporate tax rate responds to investment incentives and corporate performance. The study added to finance knowledge that fiscal policy affects corporate operations. | |
| dc.identifier.citation | : Nganyi, S. M., Koori, J., & Abdul, F. (2024). Intervening effect of corporate performance on the relationship between investment incentives and effective corporate tax rate for manufacturing firms in Kenya. The Strategic Journal of Business & Change Management, 11 (1), 148 – 170. http://dx.doi.org/10.61426/sjbcm.v11i1.2843 | |
| dc.identifier.uri | http://dx.doi.org/10.61426/sjbcm.v11i1.2843 | |
| dc.identifier.uri | https://ir-library.ku.ac.ke/handle/123456789/29093 | |
| dc.language.iso | en | |
| dc.publisher | The Strategic Journal of Business & Change Management | |
| dc.title | Intervening Effect of Corporate Performance on the Relationship between Investment Incentives and Effective Corporate Tax Rate for Manufacturing Firms in Kenya | |
| dc.type | Article |