Determinants of Tax Incentives and the Effect of Corporate Tax Rate on the Foreign Direct Investment
Corporate tax incentives are granted by governments to encourage foreign direct investment FDI. While the tax policy in Iraq varies for both domestic and foreign investments, the Iraqi government offers tax holidays between 3 to 10 years to attract foreign investors to do their desirable investment...
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| Format: | Article |
| Language: | Arabic |
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Cihan University-Erbil
2022-04-01
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| Series: | Cihan University-Erbil Journal of Humanities and Social Sciences |
| Subjects: | |
| Online Access: | https://journals.cihanuniversity.edu.iq/index.php/cuejhss/article/view/581 |
| _version_ | 1818060860555264000 |
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| author | Shene M. Kamaran Abdulla Hazhar K. Ali |
| author_facet | Shene M. Kamaran Abdulla Hazhar K. Ali |
| author_sort | Shene M. Kamaran Abdulla |
| collection | DOAJ |
| description |
Corporate tax incentives are granted by governments to encourage foreign direct investment FDI. While the tax policy in Iraq varies for both domestic and foreign investments, the Iraqi government offers tax holidays between 3 to 10 years to attract foreign investors to do their desirable investments. The objective of this research is to analyze how Iraqi's corporate tax rate affects FDI, and study the comparison between Iraqi and KRG tax policies. The data are annual observations of the Iraqi tax rate which is the net percentage of profit, and FDI net percentage of GDP. The time-series data from 2005 to 2019 were employed. Three distinct sorts of tests are engaged in this research, the first stage unit root test is conducted to determine the stationary of the data, secondly, Johansen co-integration test was used to find co-integration between variables, and finally, the Granger Causation test is used to determine causality among variables over the period. The finding result shows that the tax rate and FDI are co-integrated and have a long-run relationship. Particularly, foreign direct investment is impacted by changes in the tax rate, while fluctuation in the number of FDI has not any influence on the tax rate.
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| first_indexed | 2024-12-10T13:39:08Z |
| format | Article |
| id | doaj.art-b7ee4cbcc884416785bd8bf0772c4a1c |
| institution | Directory Open Access Journal |
| issn | 2707-6342 |
| language | Arabic |
| last_indexed | 2024-12-10T13:39:08Z |
| publishDate | 2022-04-01 |
| publisher | Cihan University-Erbil |
| record_format | Article |
| series | Cihan University-Erbil Journal of Humanities and Social Sciences |
| spelling | doaj.art-b7ee4cbcc884416785bd8bf0772c4a1c2022-12-22T01:46:44ZaraCihan University-ErbilCihan University-Erbil Journal of Humanities and Social Sciences2707-63422022-04-016110.24086/cuejhss.v6n1y2022.pp92-96Determinants of Tax Incentives and the Effect of Corporate Tax Rate on the Foreign Direct InvestmentShene M. Kamaran Abdulla0Hazhar K. Ali1Department of Public Relations and Marketing, Technical College of Administration, Sulaimani Polytechnic University, Sulaymaniyah 46001, Kurdistan Region, Iraq.Department of Financial Management and Banking, Cihan University Sulaimaniya, Sulaymaniyah 46001, Kurdistan Region, Iraq. Corporate tax incentives are granted by governments to encourage foreign direct investment FDI. While the tax policy in Iraq varies for both domestic and foreign investments, the Iraqi government offers tax holidays between 3 to 10 years to attract foreign investors to do their desirable investments. The objective of this research is to analyze how Iraqi's corporate tax rate affects FDI, and study the comparison between Iraqi and KRG tax policies. The data are annual observations of the Iraqi tax rate which is the net percentage of profit, and FDI net percentage of GDP. The time-series data from 2005 to 2019 were employed. Three distinct sorts of tests are engaged in this research, the first stage unit root test is conducted to determine the stationary of the data, secondly, Johansen co-integration test was used to find co-integration between variables, and finally, the Granger Causation test is used to determine causality among variables over the period. The finding result shows that the tax rate and FDI are co-integrated and have a long-run relationship. Particularly, foreign direct investment is impacted by changes in the tax rate, while fluctuation in the number of FDI has not any influence on the tax rate. https://journals.cihanuniversity.edu.iq/index.php/cuejhss/article/view/581Tax Rate, Tax policy, Tax Incentives, FDI, Multinational companies, Johansen co-integration, Granger Causation |
| spellingShingle | Shene M. Kamaran Abdulla Hazhar K. Ali Determinants of Tax Incentives and the Effect of Corporate Tax Rate on the Foreign Direct Investment Cihan University-Erbil Journal of Humanities and Social Sciences Tax Rate, Tax policy, Tax Incentives, FDI, Multinational companies, Johansen co-integration, Granger Causation |
| title | Determinants of Tax Incentives and the Effect of Corporate Tax Rate on the Foreign Direct Investment |
| title_full | Determinants of Tax Incentives and the Effect of Corporate Tax Rate on the Foreign Direct Investment |
| title_fullStr | Determinants of Tax Incentives and the Effect of Corporate Tax Rate on the Foreign Direct Investment |
| title_full_unstemmed | Determinants of Tax Incentives and the Effect of Corporate Tax Rate on the Foreign Direct Investment |
| title_short | Determinants of Tax Incentives and the Effect of Corporate Tax Rate on the Foreign Direct Investment |
| title_sort | determinants of tax incentives and the effect of corporate tax rate on the foreign direct investment |
| topic | Tax Rate, Tax policy, Tax Incentives, FDI, Multinational companies, Johansen co-integration, Granger Causation |
| url | https://journals.cihanuniversity.edu.iq/index.php/cuejhss/article/view/581 |
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