Funding Of Federal Parastatals

An appraisal of tax holiday incentive programme could apart form critically examine the nature of and type of incentive after proceed form two angle – Micro and Macro. The micro aspect is an attempt to access the significances of the programme in the beneficiary while the macro aspect is the attempt to excess the whole aspect of aspect of the programme to the government and to the economy.
This paper only attempt to analyze the impact of holiday tax on investment on the pioneer industry form the macro aspect (that is – assessing the significances in the investment decision of the benefinciary0 it is one thing to grant tax holiday relief to the qualified companies and it is another thing whether the infant industry incentive is crucial in the investment decision of the companies affected t commence and continued operation.
The fact that the benefiting company has precedes substantial return from the point of view of the economy dose not mean that the tax holiday incentive, which they enjoy, is superfluous. Much the same result could have been archived without the enjoyment for he incentives. The general belief particularly among incentive will induce an interpretation to set up the operation n the priority areas approved by the government. This was the belief in 1952 and 1958 when the aid to pioneer industrial ordinance and the industrial development (income tax relief) acts were posed respectively.
This provides is with the tax holiday, which is the significances to pioneer income companies profit and Liquidity Company.
Bill Borrow and Porter “ liquidity model for physical incentive evaluation” is used in this work to measure the extent the industry is incentive induced.
Based partly on the result of the analysis and partly on the different conception of the effectiveness of tax holiday scheme. It is concluded that not only the infant or the pioneer companies are incentive induced but also that the scheme is working out effectively with those companies qualified and granted the status.