THE IMPACT OF TAXATION ON INVESTMENT DECISION OF LIMITED LIABILITY COMPANIES

INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The Institute of Chartered Accountants of Nigeria (2006) and the Chartered Institute of Taxation of Nigeria (2002) defined tax as an enforced contribution of money to government pursuant to a defined authorized legislation. In other words, every tax must be based on a valid statute tax can be impose taxation to a great extent, taxes influence investment decision in the economy. Decision makers must cope with the complexity of existing tax system. They might be inclined to ignore complicated tax features and rely on statutory tax rates, Azubike (2009). Hence, they may make wrong decision with respect to taxes. According to Devos (2010), a promising way to deal with the complexity of taxes that does not ignore the most important features of tax system beyond statutory tax rates is to use effective tax rates. Effective tax rates comprise the most important elements of a tax system. Such rates are useful for policy makers as well as for business managers, who demand condensed but sophisticated information on investment tax burdens, Devos (2010). However, investment decision often concern infra-marginal, profitable investments. For instance, a multinational corporation would expect to earn an economic rent when deciding the location of a new plant, Abiola & Moses (2012).Therefore, the research focuses on technical and practical issues inherent in the measurement of effective tax burdens in Nigeria.

1. 2 STATEMENT OF THE PROBLEM
Measuring the effective tax burden for the effective of taxation on investment decision required a standard measure in order to separate the effects that stem from the statutory tax rate (and the interplay of personal and corporate taxes) and the effects that are attributable to the legal tax definition of the tax. In the case of a uniform proportional income tax, this standard measure is well known. The effective tax burden on a marginal investment is equal to the statutory tax rate on interest payment once the allowance for each period follow the change in the earnings capacity value. This result is valid only under several restrictive assumptions, the most important of which is the existence of a perfect capital market under certainty. Therefore, the problem of improper measurement of effective tax burden on profitable investment, which is effective average tax burden needs to be addressed.

1.3 OBJECTIVES OF THE STUDY
The objectives of the study are to find out the following:
i)    To examine the impact of taxation on investment decision on limited liability company.
ii)    To determine the variables that impact on the burden of effective tax investment decisions of Limited Liability Company in Nigeria.
iii)   To examine the effects which tax influences investment decision in Nigerian Bottling Plc, Uyo.
iv)   To find out the problems associated with tax on investment decision of Limited Liability Company.
v)    To make useful recommendations and suggestions based on research findings.

1.4 RESEARCH QUESTIONS
i)    Does the effects of taxation influences investment decision in Nigerian Bottling Plc, Uyo?
ii)   Does the variables used in taxation impact on the burden of effective tax investment decision of Limited Liability Company?
iii)  Is there any problems associated with taxation on investment decision of Limited Liability Company?
iv)  Does taxation have any impact on investment decision in Nigerian Bottling Plc?

1.5 RESEARCH HYPOTHESES
Hypothesis1 H0: The effects of taxation do not influence investment decision in Nigerian Bottling Plc, Uyo.
H1: The effects of taxation do influence investment decision in Nigerian Bottling Plc, Uyo.
Hypothesis 2 H0: The variables used in taxation impact does not bring burden for effective tax investment decision of Limited Liability Company.
H1: The variables used in taxation impact do bring burden for effective tax investment decision of Limited Liability Company.

1.6 SIGNIFICANCE OF THE STUDY
This study is significance in the following ways:
It would provide the necessary information about taxation on investment decision to the staff and employees of Nigerian Bottling Plc, Uyo.
It would also help potential investors to remedy the problems associated with taxation of corporate income.
It will provide the management of Nigerian Bottling Plc on how to use it as a guide for effective implementation of investment decision policy.
Finally, it would serve as a resource to students and other researchers who might want to carry out their research on similar topic.

1.7 SCOPE OF THE STUDY
The study centers on the impact of taxation on investment decision of Nigerian Bottling Plc, Uyo as a Limited Liability Company.

1.8 LIMITATION OF THE STUDY
The limitation to this study was inability of management to divulge certain information which they consider sensitive and fear of publication which might be detrimental to their operation. Another limitation to the study is time constraint. The period within which the study is conducted is short for a thorough research work, hence gathering adequate information becomes very difficult. Also, finance is one of the limitations to the study. They researcher facing financial constraints to meet all the needed educational requirements including this research work. This caused the researcher to restrict his research work to one company for possible completion of the study. Finally, lack of materials on the topic, therefore the researcher resolved to seek friendly approach in order to obtain the needed materials or information from the establishment or organization under study through the administration of questionnaire.

1.9 DEFINITION OF TERMS
a)   TAXATION: This is the process of levying and collection of tax from taxable persons (Soyode & Kayola, 2006).
b)    INVESTMENT: These involve the sacrifice of current consumption opportunity in order to obtain the benefits of future consumptions possibilities (Kane, 2004).
c)    IMPACT OF TAX: This means the initial resting place of the tax (Ojo, 2003).
d)    TAX: This is defined as an enforced contribution of money to government pursuant to defend authorized.

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