Despite substantial tax incentives, the Nigerian manufacturing sector continues to face low profitability and sluggish growth. This study examines the incentive effect of annual allowance (ANALL) on the financial performance of listed consumer goods manufacturing companies, using return on assets (ROA) as the performance measure. Panel data from ten listed firms over the period 2017 to 2024 were analysed using panel regression techniques. Both fixed- and random-effects models were estimated, with the Hausman test indicating the appropriateness of the random-effects specification. The results reveal that annual allowance has a positive and statistically significant effect on ROA, suggesting that depreciation-based tax incentives enhance asset utilization and support capital reinvestment. The findings highlight the importance of well-structured and clearly administered tax incentives. Policy implications include simplifying claiming procedures, improving taxpayer guidance, and aligning tax policy with firms’ investment planning to support sustained performance in the consumer goods manufacturing sector.
(PhD) et al. (Mon,) studied this question.