Jean Bosco Harelimana
The purpose of this study was to establish the effect of corporate income tax incentives on investment using private sector manufacturing companies in Kigali special economic zone, Rwanda. The study adopted descriptive research design and the study population comprised of thirty-nine manufacturing companies in free zone in Rwanda which are registered by the private sector. The sample size comprised of 36 private companies determined from a total population of 39 companies. Only two employees that are acquainted with decision making from each manufacturing companies registered by the private sector were targeted hence the target population respondents was 72 respondents. The stratified random sampling technique was used to select the respondents. Data was collected from both primary and secondary data using questionnaires and documentation. The findings in the study revealed that tax incentives have significant positive effect on investment in private sector manufacturing companies in Rwanda. The p-values for all the variables are lower than 5% this implies that are significant. From the study the p-values are 0.009, 0.000, 0.003 and 0.000 for company income tax, capital allowance, value added tax and capital gains tax incentives respectively. The capital allowance incentive has the highest t value of 4.656, followed by company income tax incentives with 3.954, and next is capital gains tax incentives with 3.184, while the lowest is the value added tax incentives with 2.954. Based on the empirical evidences and results of the analysis, there is positive and statistically significant relationship between the tax incentives and investments. The study recommends that Government and policy makers should concentrate on efforts at ensuring that more CIT incentives and strategies that are specifically addressing small and medium enterprises are introduced.
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