The Effects of Tax Incentives on Private Domestic Investment in Addis Ababa, Ethiopia

Aschalew Kassa

doi:doi:10.11648/j.ijebo.20231104.12

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The Effects of Tax Incentives on Private Domestic Investment in Addis Ababa, Ethiopia

Aschalew Kassa

Published in International Journal of Economic Behavior and Organization (Volume 11, Issue 4)

Received: 21 October 2023 Accepted: 10 November 2023 Published: 24 November 2023

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Abstract

The main purpose of this study is to assess the effects of tax incentives on private domestic investment in Addis Ababa, Ethiopia. The study has adopted a Quantitative research method in which primary data were collected from private domestic investors’ through questionnaires and also secondary data which has been collected from Ethiopian Investment Commission (EIC) and Ethiopian revenues and customs authority through document analysis. Descriptive research method was used to describe the major roles of tax incentive on private domestic investment. Hence, the finding reveals that the major role of tax incentive on private domestic investment is stimulating capital accumulation. On the other hand OLS regression method was employed to assess the respective effect of tax incentives on private domestic investment. Thus, the finding reveals that tax holiday and export duty free significantly affect the capital value of private domestic investment whereas customs duty exemption and loss carries forward were found having insignificant effect on capital value of private domestic investment. Regarding, the control variables age, occupation and infrastructure was founded to have a significant positive influence on capital value of private domestic investment. Moreover, in a bid to solve problems related with tax incentives and private domestic investment, clearly assessing and understanding costs and benefit of providing tax incentives and making it specific to private domestic investors demand as well as building transparent and accountable tax incentive administration were forwarded for both policy makers and implementers respectively.

Published in	International Journal of Economic Behavior and Organization (Volume 11, Issue 4)
DOI	10.11648/j.ijebo.20231104.12
Page(s)	164-173
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Tax Holiday, Export Duty Free, Customs Duty Free, Loss Carries Forward

References

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Kassa, A. (2023). The Effects of Tax Incentives on Private Domestic Investment in Addis Ababa, Ethiopia. International Journal of Economic Behavior and Organization, 11(4), 164-173. https://doi.org/10.11648/j.ijebo.20231104.12

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Kassa, A. The Effects of Tax Incentives on Private Domestic Investment in Addis Ababa, Ethiopia. Int. J. Econ. Behav. Organ. 2023, 11(4), 164-173. doi: 10.11648/j.ijebo.20231104.12

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AMA Style

Kassa A. The Effects of Tax Incentives on Private Domestic Investment in Addis Ababa, Ethiopia. Int J Econ Behav Organ. 2023;11(4):164-173. doi: 10.11648/j.ijebo.20231104.12

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@article{10.11648/j.ijebo.20231104.12,
  author = {Aschalew Kassa},
  title = {The Effects of Tax Incentives on Private Domestic Investment in Addis Ababa, Ethiopia},
  journal = {International Journal of Economic Behavior and Organization},
  volume = {11},
  number = {4},
  pages = {164-173},
  doi = {10.11648/j.ijebo.20231104.12},
  url = {https://doi.org/10.11648/j.ijebo.20231104.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijebo.20231104.12},
  abstract = {The main purpose of this study is to assess the effects of tax incentives on private domestic investment in Addis Ababa, Ethiopia. The study has adopted a Quantitative research method in which primary data were collected from private domestic investors’ through questionnaires and also secondary data which has been collected from Ethiopian Investment Commission (EIC) and Ethiopian revenues and customs authority through document analysis. Descriptive research method was used to describe the major roles of tax incentive on private domestic investment. Hence, the finding reveals that the major role of tax incentive on private domestic investment is stimulating capital accumulation. On the other hand OLS regression method was employed to assess the respective effect of tax incentives on private domestic investment. Thus, the finding reveals that tax holiday and export duty free significantly affect the capital value of private domestic investment whereas customs duty exemption and loss carries forward were found having insignificant effect on capital value of private domestic investment. Regarding, the control variables age, occupation and infrastructure was founded to have a significant positive influence on capital value of private domestic investment. Moreover, in a bid to solve problems related with tax incentives and private domestic investment, clearly assessing and understanding costs and benefit of providing tax incentives and making it specific to private domestic investors demand as well as building transparent and accountable tax incentive administration were forwarded for both policy makers and implementers respectively.
},
 year = {2023}
}

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TY  - JOUR
T1  - The Effects of Tax Incentives on Private Domestic Investment in Addis Ababa, Ethiopia
AU  - Aschalew Kassa
Y1  - 2023/11/24
PY  - 2023
N1  - https://doi.org/10.11648/j.ijebo.20231104.12
DO  - 10.11648/j.ijebo.20231104.12
T2  - International Journal of Economic Behavior and Organization
JF  - International Journal of Economic Behavior and Organization
JO  - International Journal of Economic Behavior and Organization
SP  - 164
EP  - 173
PB  - Science Publishing Group
SN  - 2328-7616
UR  - https://doi.org/10.11648/j.ijebo.20231104.12
AB  - The main purpose of this study is to assess the effects of tax incentives on private domestic investment in Addis Ababa, Ethiopia. The study has adopted a Quantitative research method in which primary data were collected from private domestic investors’ through questionnaires and also secondary data which has been collected from Ethiopian Investment Commission (EIC) and Ethiopian revenues and customs authority through document analysis. Descriptive research method was used to describe the major roles of tax incentive on private domestic investment. Hence, the finding reveals that the major role of tax incentive on private domestic investment is stimulating capital accumulation. On the other hand OLS regression method was employed to assess the respective effect of tax incentives on private domestic investment. Thus, the finding reveals that tax holiday and export duty free significantly affect the capital value of private domestic investment whereas customs duty exemption and loss carries forward were found having insignificant effect on capital value of private domestic investment. Regarding, the control variables age, occupation and infrastructure was founded to have a significant positive influence on capital value of private domestic investment. Moreover, in a bid to solve problems related with tax incentives and private domestic investment, clearly assessing and understanding costs and benefit of providing tax incentives and making it specific to private domestic investors demand as well as building transparent and accountable tax incentive administration were forwarded for both policy makers and implementers respectively.

VL  - 11
IS  - 4
ER  -

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Aschalew Kassa

Center for Public Policy Studies, Ethiopian Civil Service University, Addis Ababa, Ethiopia

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APA Style

Kassa, A. (2023). The Effects of Tax Incentives on Private Domestic Investment in Addis Ababa, Ethiopia. International Journal of Economic Behavior and Organization, 11(4), 164-173. https://doi.org/10.11648/j.ijebo.20231104.12

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ACS Style

Kassa, A. The Effects of Tax Incentives on Private Domestic Investment in Addis Ababa, Ethiopia. Int. J. Econ. Behav. Organ. 2023, 11(4), 164-173. doi: 10.11648/j.ijebo.20231104.12

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AMA Style

Kassa A. The Effects of Tax Incentives on Private Domestic Investment in Addis Ababa, Ethiopia. Int J Econ Behav Organ. 2023;11(4):164-173. doi: 10.11648/j.ijebo.20231104.12

Copy | Download

@article{10.11648/j.ijebo.20231104.12,
  author = {Aschalew Kassa},
  title = {The Effects of Tax Incentives on Private Domestic Investment in Addis Ababa, Ethiopia},
  journal = {International Journal of Economic Behavior and Organization},
  volume = {11},
  number = {4},
  pages = {164-173},
  doi = {10.11648/j.ijebo.20231104.12},
  url = {https://doi.org/10.11648/j.ijebo.20231104.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijebo.20231104.12},
  abstract = {The main purpose of this study is to assess the effects of tax incentives on private domestic investment in Addis Ababa, Ethiopia. The study has adopted a Quantitative research method in which primary data were collected from private domestic investors’ through questionnaires and also secondary data which has been collected from Ethiopian Investment Commission (EIC) and Ethiopian revenues and customs authority through document analysis. Descriptive research method was used to describe the major roles of tax incentive on private domestic investment. Hence, the finding reveals that the major role of tax incentive on private domestic investment is stimulating capital accumulation. On the other hand OLS regression method was employed to assess the respective effect of tax incentives on private domestic investment. Thus, the finding reveals that tax holiday and export duty free significantly affect the capital value of private domestic investment whereas customs duty exemption and loss carries forward were found having insignificant effect on capital value of private domestic investment. Regarding, the control variables age, occupation and infrastructure was founded to have a significant positive influence on capital value of private domestic investment. Moreover, in a bid to solve problems related with tax incentives and private domestic investment, clearly assessing and understanding costs and benefit of providing tax incentives and making it specific to private domestic investors demand as well as building transparent and accountable tax incentive administration were forwarded for both policy makers and implementers respectively.
},
 year = {2023}
}

Copy | Download

TY  - JOUR
T1  - The Effects of Tax Incentives on Private Domestic Investment in Addis Ababa, Ethiopia
AU  - Aschalew Kassa
Y1  - 2023/11/24
PY  - 2023
N1  - https://doi.org/10.11648/j.ijebo.20231104.12
DO  - 10.11648/j.ijebo.20231104.12
T2  - International Journal of Economic Behavior and Organization
JF  - International Journal of Economic Behavior and Organization
JO  - International Journal of Economic Behavior and Organization
SP  - 164
EP  - 173
PB  - Science Publishing Group
SN  - 2328-7616
UR  - https://doi.org/10.11648/j.ijebo.20231104.12
AB  - The main purpose of this study is to assess the effects of tax incentives on private domestic investment in Addis Ababa, Ethiopia. The study has adopted a Quantitative research method in which primary data were collected from private domestic investors’ through questionnaires and also secondary data which has been collected from Ethiopian Investment Commission (EIC) and Ethiopian revenues and customs authority through document analysis. Descriptive research method was used to describe the major roles of tax incentive on private domestic investment. Hence, the finding reveals that the major role of tax incentive on private domestic investment is stimulating capital accumulation. On the other hand OLS regression method was employed to assess the respective effect of tax incentives on private domestic investment. Thus, the finding reveals that tax holiday and export duty free significantly affect the capital value of private domestic investment whereas customs duty exemption and loss carries forward were found having insignificant effect on capital value of private domestic investment. Regarding, the control variables age, occupation and infrastructure was founded to have a significant positive influence on capital value of private domestic investment. Moreover, in a bid to solve problems related with tax incentives and private domestic investment, clearly assessing and understanding costs and benefit of providing tax incentives and making it specific to private domestic investors demand as well as building transparent and accountable tax incentive administration were forwarded for both policy makers and implementers respectively.

VL  - 11
IS  - 4
ER  -

Copy | Download