Influence of Tax Compliance Cost and Tax Incentives on Financial Performance of Manufacturing Industries

Abstract

This study examines the influence of tax compliance costs and tax incentives on the financial performance of manufacturing industries. Descriptive survey research design was used in carrying out this study, with total population of 947 Managers and Accountant of manufacturing industry in Cross River State, Nigeria. The sample size of two hundred and sixty nine (269) Managers and Accountant of manufacturing industry in Cross River State, Nigeria was drawn for the study obtained using Cohen, Mansion and Morison (2018) criteria for a populations sampling at confidence interval level of 95  confidence level were composed using multi-stage sampling. Questionnaire “influence of tax compliance cost and tax incentives on financial performance of manufacturing industries Questionnaire (ITCTIFPMIQ) was used. The questionnaire was validated by 3 lecturers: 2 from Department of vocational technical education and 1 from Department of science education. The reliability; cluster A=0.77, cluster B=0.72, cluster C= 0.81 with an overall reliability coefficient of 0.76 was obtained through Cronbach alpha method. Mean and standard deviation was used to answer research questions.  The mean value of 2.5 was used as the bench mark for answering the research questions. Mean values of 2.5 and above was considered as agreed while mean values below 2.5 was considered as disagreed. The null hypotheses was tested using independent t – test statistic at 0.05 level of significance. The null hypotheses was rejected if the probability value was less than the set value of 0.05 level of significance (P< 0.05), but if any probability value was greater than or equal to 0.05 (P≥0.05), such null hypothesis was not rejected. The findings suggest that manufacturing firms need to optimize their tax compliance processes to minimize costs and strategically leverage tax incentives to enhance financial performance. Policymakers should consider simplifying tax regulations and designing more effective incentive programs to support the manufacturing sector's growth and competitiveness.