The Role of Tax Incentive in Attracting Direct Foreign Investment(DFI)

Foreign Direct Investment (FDI) has become one of the striking features of the present globalized business world. Due to its presumed benefits, countries especially developing once consider FDI as an engine to extricate themselves from their vicious circle of abject poverty. Accordingly, countries engaged themselves in fierce competition to attract FDI by deploying various forms of tax incentives. Like any developing country, Ethiopia offers generous tax incentive to stimulate FDI inflow. Nonetheless, the efficacy of tax incentives in attracting FDI is often questioned. Though the country highly rely on tax incentive, empirical data reveal that tax incentive play insignificant role compared with other non-tax FDI factors. Owing to the inefficacy of tax incentives in attracting FDI and the manifold problems associated with it vividly witnessed that the rationale behind tax incentive does not serve the purpose of sustainable development. This book has made an in-depth investigation on the nexus between tax incentives and FDI inflow, and thereby it vividly depicts inefficacy of tax incentive in attracting DFI and the problems associated with it.

Autorentext

Temesgen Ayele Tsegaw was born in October 05, 1987. He has got his LL.B in 2008 and LL.M (Taxation and Investment Laws) in 2013 from Haromaya University and Mekelle University respectively. He is now lecturer -at-laws at Debre Markos University, School of Law. He is also Licensed Attorney and Consultant at Law.