Transformative tax policy reforms to attract foreign direct investment: Building sustainable economic frameworks in emerging economies
1 Independent Researcher, Lagos, Nigeria.
2 Imo State Internal Revenue Service, Nigeria.
3 Newcross Exploration and Production Limited, Nigeria.
Review
International Journal of Multidisciplinary Research Updates, 2022, 04(01), 008–015.
Article DOI: 10.53430/ijmru.2022.4.1.0057
Publication history:
Received on 22 July 2022; revised on 19 October 2022; accepted on 22 October 2022
Abstract:
This paper examines the critical role of tax policy reforms in attracting Foreign Direct Investment (FDI) to emerging economies and building sustainable economic frameworks. By analyzing key theories and models linking tax policy and FDI, the paper highlights the economic principles underlying tax incentives and their impact on creating a competitive advantage for emerging markets. It provides a detailed exploration of essential tax policy components, such as tax incentives, tax holidays, and reduced corporate tax rates, and discusses best practices from successful emerging economies. The paper also addresses the significant challenges faced in implementing tax reforms, including political, economic, and administrative barriers, and identifies opportunities for overcoming these obstacles through international cooperation, technological advancements, capacity building, and stakeholder engagement. Practical recommendations for policymakers are offered to design and implement effective tax policy reforms that attract FDI, enhance revenue collection, and promote long-term economic stability and growth. The findings underscore the necessity of aligning tax reforms with broader economic development goals to ensure they are both beneficial in the short term and sustainable and inclusive in the long term.
Keywords:
Foreign Direct Investment (FDI); Tax Policy Reforms; Emerging Economies; Tax Incentives; Economic Development; Sustainable Growth
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