AJIBM  Vol.6 No.1 , January 2016
Measuring the Effects of Corporate Tax on Corporate Income: The Role of Corporate Income Tax Incentives at Regimanuel Gray (Ghana) Ltd.
Abstract: Three problems were identified in this study. The first aspect of the problem is that Ghana’s housing market is not affordable for many lower-income Ghanaians, in contravention of the Government of Ghana’s goal of creating a more affordable housing market. The second aspect of the problem is that it is not known whether the Government of Ghana’s corporate income tax incentive for low-cost housing developers has been successful in raising income for developers. The third aspect of the problem is that Regimanuel Gray (Ghana) Ltd. does not yet have a sound empirical basis on which to weigh low-cost versus non-low-cost housing projects in its portfolio. The objective of the study was to determine whether tax incentives at Regimanuel Gray (Ghana) Ltd. were positively associated with company income. It was found that there was a) a statistically significant (p < 0.01) difference between mean income associated with low-income housing (M = $12,567,370, SD = 1,324,085) and mean income associated with non-low-income housing (M = $139,639,000, SD = 6,095,264) and b) a statistically significant (p < 0.01) difference between mean ROI associated with low-income housing (M = 1.415, SD = 0.1721062) and mean ROI associated with non-low-income housing (M = 15.948, SD = 1.226073). The contribution of the study was thus to discover that it is economically inefficient for Regimanuel Gray to engage in low-cost housing projects under the current tax break scheme. The main recommendations emerging this analysis are that a) Regimanuel Gray ought to dedicate more of its productive resources to non-low-cost housing and b) Regimanuel Gray ought to press the government harder for more tax incentives to build low-cost housing.
Cite this paper: Dzreke, S. and Franklin Dzreke, M. (2016) Measuring the Effects of Corporate Tax on Corporate Income: The Role of Corporate Income Tax Incentives at Regimanuel Gray (Ghana) Ltd.. American Journal of Industrial and Business Management, 6, 1-23. doi: 10.4236/ajibm.2016.61001.

[1]   World Bank (2014) World Development Indicators.

[2]   Arthur, P. (2006) The State, Private Sector Development, and Ghana’s “Golden Age of Business”. African Studies Review, 49, 31-50.

[3]   Krugman, P. and Wells, R. (2009) Economics. Worth Publishers, New York.

[4]   Bank of Ghana (2007) The Housing Market in Ghana.

[5]   Awuvafoge, S.A. (2013) Affordable Housing in Urban Areas in Ghana Housing Project.

[6]   Ernst & Young (2014) Ghana.

[7]   Regimanuel Gray (2014) About Us.

[8]   Asiedu, A.B. and Arku, G. (2009) The Rise of Gated Housing Estates in Ghana: Empirical Insights from Three Communities in Metropolitan Accra. Journal of Housing and the Built Environment, 24, 227-247.

[9]   Grant, R. (2005) The Emergence of Gated Communities in a West African Context: Evidence from Greater Accra, Ghana. Urban Geography, 26, 661-683.

[10]   Yeboah, I.E. (2003) Demographic and Housing Aspects of Structural Adjustment and Emerging Urban form in Accra, Ghana. Africa Today, 50, 107-119.

[11]   Boye, P. (2012) The Use of Multiple Linear Regressions in Determining the Relationship between Housing Unit Price and Some Major Components in a Real Estate Building. Scottish Journal of Arts, Social Sciences, and Scientific Studies, 7, 3-17.

[12]   Smith, A. (1801) The Wealth of Nations. N. Kelly, Dublin.

[13]   Feldstein, M.S. (1974) Tax Incentives, Stabilization Policy, and the Proportional Replacement Hypothesis: Some Negative Conclusions. Southern Economic Journal, 40, 544-552.

[14]   Russo, B. (2004) A Cost-Benefit Analysis of R&D Tax Incentives. The Canadian Journal of Economics/Revue Canadienne d’Economique, 37, 313-335.

[15]   Usher, D. (1977) The Economics of Tax Incentives to Encourage Investment in Less Developed Countries. Journal of Development Economics, 4, 119-148.

[16]   Yelpaala, K. (1984) The Efficacy of Tax Incentives within the Framework of the Neoclassical Theory of Foreign Direct Investment: A Legislative Policy Analysis. Texas International Law Journal, 19, 365-413.

[17]   Klemm, A. and Van Parys, S. (2012) Empirical Evidence on the Effects of Tax Incentives. International Tax and Public Finance, 19, 393-423.

[18]   Arku, G. (2009) Housing Policy Changes in Ghana in the 1990s. Housing Studies, 24, 261-272.

[19]   Tipple, A. and Korboe, D. (1998) Housing Policy in Ghana: Towards a Supply-Oriented Future. Habitat International, 22, 245-257.

[20]   Obeng-Odoom, F. and Amedzro, L. (2011) Inadequate Housing in Ghana. Urbani Izziv, 22, 127-137.

[21]   Boamah, N.A. (2011) The Regulatory Environment and Housing Finance Market in Ghana. Property Management, 29, 406-422.

[22]   Konadu-Agyemang, K. (2001) Structural Adjustment Programs and Housing Affordability in Accra, Ghana. Canadian Geographer/Le Géographe Canadien, 45, 528-544.

[23]   Anonymous (2011) Ghana: Regimanuel Gray Introduces Katamanso Project during Its Anniversary. MENA Report.

[24]   Grant, R. (2007) Geographies of Investment: How Do the Wealthy Build New Houses in Accra, Ghana? Urban Forum, 18, 31-59.

[25]   Zee, H.H., Stotsky, J.G. and Ley, E. (2002) Tax Incentives for Business Investment: A Primer for Policy Makers in Developing Countries. World Development, 30, 1497-1516.

[26]   Pellechio, A.J., Sicat, G.P. and Dunn, D.G. (1987) Effective Tax Rates under Varying Tax Incentives.

[27]   Greer, G. and Kolbe, P.T. (2003) Investment Analysis for Real Estate Decisions. Dearborn, New York.

[28]   Aristotle (2004) Politics. Penguin, London.

[29]   Pigou, A. (2002) The Economics of Welfare. Transaction Publishers, New York.

[30]   Coase, R. (1960) The Problem of Social Cost. The Journal of Law and Economics, 3, 1-44.

[31]   Pigou, A. (1916) The Theory of Policy Analysis.

[32]   Pigou, A. (1925) Memoirs of Alfred Marshall. Cambridge University Press, Cambridge, UK.

[33]   Hart, H.L.A. (1961) The Concept of Law. Clarendon Press, Oxford.