Determinants of successful utilization of tax incentives in SMEs manufacturing sectors

This study serves to achieve two objectives; (1) To determine the key factors associated with successful utilization of tax incentives and; (2) To investigate the significant factors in (1) via the logistic approach. Using the convenience sampling, 125 SMEs in the manufacturing sector were selected as samples. The findings show four factors are significant; capital investment, business strategies, government support and environment attribute to successful utilization of tax incentives. A further analysis using the logistic approach is extended to determine the underlying factors of why some SMEs are able to utilize the tax incentives, whilst others are not. The results from the logistic approach reveal that factors related to the governance of companies have significant influence on the ability of the company to utilize the tax incentives effectively. This research uses both primary and secondary data and employs methods such as survey and retrieving real financial data from companies´ financial statements.