Company Income Tax and Foreign Investments in Nigeria

The aim for this study was to investigate the relationship between company income tax and foreign investment in Nigeria. The study empirically explored the complex relationship between company’s income tax and their impact on foreign investments represented by foreign direct and foreign portfolio investments from the year 2000 - 2022 using an Ex - Post Facto design. The population of this study relates to the Nigeria economy only and the annual time series secondary data were sourced and obtained from relevant literature including the Central Bank of Nigeria (CBN) Statistical Bulletin, the National Bureau of Statistics (NBS) publications, the annual reports of the Federal Inland Revenue Service (FIRS). Descriptive and inferential statistics were used for the primary and secondary analysis to test the research hypotheses. The Auto Regressive Distributed Lag (ARDL) model was employed for the multivariate analysis to determine the short - run and long - run relationship between the variables under study. The findings from this study indicated that company income tax have significant impacts on foreign investments in the short - run and long - run. Based on our findings, higher companies income tax affects the propensity to invest in Nigeria. Consequently, we recommended the optimization of tax policies to the Nigerian government by lowering corporate tax rates in order to attract foreign investments. It is also recommended by this study that the government should consider the harmonization of Company Income Tax Policy to reduce the burdens on business thereby making the Nigerian investment climate predictable and attractive to foreign investors.