After the economic depression of the 1930’s the concept of economy. Many nations began to implement policy measures aimed at both raising revenue for the government and encouraging investment via investment tax credit.  

In Nigeria, the concept of taxation, especially as it relates to tax incentive had been an important topic for discussion both in the government circle and in the private sector. A review of the annual budgets of the federal government reveals that the government usually give tax concessions and incentives to firms/ corporations in the following lines of business: manufacturing, agriculture and the mining sector. Over the years, successive administrations in the country had continued to reduce rate of effective taxes. In 1996 for instance, the highest rate of income tax was further reduced to 25% from 30% because increasing revenue from consumption taxation would compensate the military regime them felt that the loss in revenue as a result of the income tax cut. Would be compensated by increasing revenue from consumption taxation.

The purpose of this project/ research, therefore, is to ascertain the effects of tax incentives on the development of manufacturing industries in Nigeria by using Emenite (NIG) Limited as a case study. The project/ research consists of five chapters.

While chapter one served as the introductory part of the project/ research, chapter two dealt with the literature review where the various forms of tax incentives in Nigeria and the school of thought on the subject matter were discussed. Chapter three discusses the methodology for the research and chapter four deals with data analysis. Finally, in chapter five, the researchers discussed the findings of the research, summary, conclusion, and recommendations




The concept of taxation sharp momentum after the great would of economic depression of the 1930s. After the depression aimed at raising enough capital to provide for social overhead expenses and at the same time embarking on several ways to lift the standard of living of their citizens.

In Nigeria, there are many forms of taxations in practice dating back to the days of our great grandfathers, that is before the coming of our colonial masters, whereby communities tax themselves through labor to execute community projects or to help the community suppress external attack or aggression. Therefore, taxation can be referred to as machinery by which communities or groups are made to contribute part of their incomes in some agreed amount and method for the purpose of administering the society. This accounts for the reasons why taxation is often referred to as a civic responsibility.

The present tax laws in Nigeria were borne out of the Raisman’s fiscal commission of inquiry of 1957. Before them, we only had what was called the income tax colonies with similar providing section 70, subsection 1 of the Nigeria constitution, the order in council of 1960 which conferred an exchange power upon parliament to make laws for the whole Nigeria or any part of the country with respect to personal income tax. In the exercise of these powers, the federal government enacted the income tax management act of 1961 (ITMA) and because Lagos territory was being administrated as a region it enacted the personal income tax (Logos). Act 1961.

In April 1961, the income tax management act came into operation and all the existing laws at the regional level had to be amended to bring them into conformity with what the Raisman fiscal commission recommend in 1958, the introduction of the uniform basic principle of taxing the income of persons other than limited liability companies throughout the country. Oliver Wendell Holmes, United States Supreme Court judge said, “Taxes are the price we pay for a civilized society”.

Nigeria and been an encouragement by the government to attract individuals and corporate bodies to invest in the country. The idea of the research was to assess how the incentives had helped industries grow and how companies had availed themselves of these opportunities.


The study entitled effects of tax incentive in the development of manufacturing industries attempt to determine the way by which some organization or firm especially Emenite  Ltd. Emene has utilized huge amounts of money. Nigerian government sacrifices every year by way of tax incentives towards the development of manufacturing industries.

Some of the problems, which they encounter, are as follows.

    Liability of the tax incentives scheme to redirect the investment patterns of individuals and corporate bodies towards the development of manufacturing industries.

    The level of inefficiency in administering tax incentives schemes has made it impossible to use it to attract foreign investors to the manufacturing industries.

    Liability to use tax incentives in generating employment in manufacturing industries.

     Most manufacturing industries are unable to apply tax incentives in a flexible manner.


The purpose of this study is as follows:

    To ascertain the extent tax incentives have redirect investment of individuals and corporate bodies towards the development of manufacturing industries.

    To establish how inefficiency in administering tax incentive schemes has made it impossible to use it to attract foreign investors to manufacturing industries.

    To ascertain the extent to which most manufacturing industries are unable to apply tax incentives in a flexible manner.


The research questions of this study are as follows:

    To what extent do tax incentives redirect the investment pattern of individuals and corporate bodies towards the development of manufacturing industries?

    To what extent does inefficiency in administering tax incentive scheme distorts foreign investors to manufacturing industries?

    To what extent do tax incentives help in employment generation?

    To what extent do most manufacturing industries were unable to apply the tax incentives in a flexible manner.


This work will be very useful to the government. It will enable the government to know the extent to which manufacturing industries have been responding to the available tax incentives.

            Government, through this research, could evaluate the profitability of the tax incentives that is whether the revenue, in other words, will enable the government to know whether tax investment patterns of individuals and corporate bodies towards the development of manufacturing industries.

This study will also enable the government to compare the identify those that are profitable to the Nigerian economy at large.

This study will go a long way to sensitize companies and individuals on the existing tax incentives available to the manufacturing industry and their companies to make qualitative investment and tax decisions modeled to elevate the organization’s growth patterns.


For the scope, of this study, the researcher will restrict himself to the corporation tax incentive available to the manufacturing company in Nigeria. With particular reference to Emenite (NIG) Ltd. As a case study.


Incentive: - According to advanced learner’s Dictionary, the word incentive is “that which incites or rouses a person action”

Therefore, tax incentive encompasses all the measures adopted by the government to motivate taxpayer or manufacturing companies to respond to their tax obligations. This may include adjustments to tax policy aimed at lessening the effects on an industry.

The taxation of consumption rather than income may, for instance, be considered as an incentive by people who believe that taxpayers find it more difficult to bear their income tax burden or direct taxes exert a harsher incidence on the tax base. An incentive is created when the government deliberately manipulates the tax system to the advantage of a potential investor or corporate body by adopting favorable tax policies.

Manufacture: According to the award illustrated dictionary (COZA), manufacture is defined as the making of articles by physical labor or machinery especially on a large scale; branch of such an industry.

Industry: the same dictionary defined “industry” as a branch of trade or manufacture, especially one employing much labor and capital infect, manufacturing in general.




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