An Empirical study to investigate the Impact of Tax Incentives on Foreign Direct investment in Pakistan

Abstract

This study examines the impact of corporate income tax, inflation, annual tax revenue, customs and excise duty and trade openness on foreign direct investment in Pakistan. Pakistan Statistical Bureau, Pakistan Federal Board of revenue, Economy of Pakistan, and web sources provided the concern data from 1990-2018. Census method used to target the elements of all population in the export processing zone in Pakistan. The impact of corporate income tax, inflation, annual tax revenue, customs and excise duty, and trade openness on foreign direct investment checked through using multiple regression model and correlation analysis.There is positive and significance influence of annual tax revenue and corporate income tax on foreign direct investment except customs and excise duty which has negative impact. Trade openness and inflation shows littleeffect on foreign direct investment. Results did not show the impact of dependent variable on independent variables for short term and long term. The researcher suggests that government can attract more foreign direct investment from foreign investors by providing more tax incentives