EFFECT OF VAT INCENTIVES ON THE PERFORMANCE OF EPZ FIRMS IN KENYA
DOI:
https://doi.org/10.47672/ajf.324Keywords:
VAT incentives, performance, EPZ firms, ROA, number of jobs created and years of operationAbstract
Purpose: The purpose of this study was to determine the effect of VAT Incentive on the performance of EPZ firms in Kenya.
Methodology: This research used correlation research design. Sample size of all the 86 registered EPZs firms was used in this study. Primary data was obtained using questionnaires. Secondary data from the registered firms was collected on; ROA, number and value of jobs and the length of stay of the firms. The study used both descriptive and inferential statistics to conduct data analysis.
Results: The results of study revealed that at 5% significance level, VAT incentives had a positive and significant relationship with performance of EPZ firms measured using ROA. The results further revealed that at 5% significance level, VAT incentives were found to have positive and significant relationship with performance of EPZ firms measured using the number of total jobs created in Kenya. The results also revealed that at 5% significance level, VAT incentives were found to have positive and significant relationship with performance of EPZ firms measured using the number of years in operation
Unique contribution to theory, practice and policy Based on the study findings, it was recommended that the government should reconsider its VAT policy by encouraging more VAT rebates to firms in order to boost their productivity and increase the volume of exports. The study also recommends that the government should introduce a strong monitoring unit to oversee the administration of tax incentives. Government should equally pay attention to the issue of security and infrastructure which are basic in order to maximize the benefits of tax incentives.
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