The Effect of Tax Incentives on Investment Promotion in Tanzania

Attracting investors to invest their capital by using Tax Incentives is among the strategies which have been given priorities by various governments around the world Government of Tanzania being one of them. This book has used scientific tools of econometric (OLS and ECM) to investigate the effect of tax incentives on investment promotion in Tanzania. The empirical results show that tax incentives are insignificant on investment promotion in Tanzania. Moreover it was discovered that previous investment, current interest rate and inflation of the past two years are highly significant on promoting investment in the short run. The book has proposed a number of recommendations including the government should pay attention on the review of all tax incentives with the aim of removing or reducing them and concentrating on solving the existing problem of poor investment climate as well as having proper policy on improving investment performance, stabilize interest rate and inflation rate in order to ensure effective investment promotion.