| dc.description.abstract | Performance of domestic airlines in the past it is not encouraging and through the
introduction of tax incentives, they started experiencing some sort of relief, which were based
on motivation to invest which enhanced their growth. It is therefore for this reason that the
researcher sought to establish on how tax incentives had affected performance of domestic
airlines in Kenya. The specific research objective was based on determining the on how
corporate tax income incentives had had an effect on domestic airline financial performance,
to determine the effect of tax holiday incentives on domestic airline performance, and to
analyze the effect of capital allowance incentives on domestic airline performance. The study
employed a descriptive research design, with the target population being the 15 domestic
airlines in Kenya. The sampling technique used was census technique due to the fact that the
target population was manageable. Secondary data was used in this study which was
collected from the financial reports of the airlines within a period of 5 years from 2015-2019.
The data was analyzed with the help of SPSS version 26 whereby diagnostic test was done
through multicollinearity, heteroscedasticity as well as normal test from the regression model
which was used to analysis the panel data collected and the presentation was through the help
of figures and tables. The study after data analysis revealed that their corporate income tax
and tax holiday which were the independent variables were found to be satisfactory in
explaining the financial performance (return on asset) of Kenyan domestic airlines. Because
the p-values of the tax holiday and capital allowance are statistically significant. p-value of
corporate income tax which was statistically insignificant b based financial results. As a
result, the study recommended that because corporate income tax has an impact on return on
asset of an entity, the management of Kenya's domestic airlines should make better use of
other tax breaks. They should also use the tax holiday to seek additional tax relief in their
investments so that they can be protected from the negative risk of operation when the
corporate income tax is highly induced without taking the tax incentive perspective into
account. Tax holidays in terms of aggressiveness and adverse tax shielding in order to protect
themselves from harsh taxation bases. As a result, management should consider pursuing
additional tax breaks in order to boost their return on asset. Kenya's domestic airline
management should make better use of capital allowance when given this type of incentive.
The study also recommends that the Kenyan government improve existing policies to
enhance ease of undertaking business activities through reduction of bureaucracy in obtaining
share and debt financing for domestic airlines. | en_US |
