Determinats of reinvestment allowance (RA) tax incentive utilization in embracing industry 4.0; [Czynniki wykorzystania inicjatywy inwestycyjnej ulgi podatkowej (RA) w adopcji przemysłu 4.0.]

• Published in: Polish Journal of Management Studies
• Main Author: Hamid N.A.; Hamzah F.H.A.; Noor R.M.; Azali N.M.
• Format: Article
• Language: English
• Published: Czestochowa University of Technology 2018
• Online Access: https://www.scopus.com/inward/record.uri?eid=2-s2.0-85059844559&doi=10.17512%2fpjms.2018.18.2.08&partnerID=40&md5=2abe3e2908ee0970d0d6b2e0dd0768c7

In the era of automation, Malaysia is compelled to embrace Industry 4.0 in order to remain competitive. Thus, the nation needs to be better prepared to confront the challenges ahead. From the perspective of taxation, the government has crafted many tax incentives such as Reinvestment Allowance (RA) to stimulate business expansion, automation, modernization, and diversification. The aim of this paper is to determine the factors affecting the utilization of RA among incentivised firms in Malaysia. Confidential tax return data was analysed using binomial logistic regression and the results confirmed that there are connections between firm profitability, investment, sector, and effective tax rate with the utilization of RA. Thus, by focusing on the potential determinants in RA utilization, it will benefit both policy makers and industry players to enhance effective application of RA that was designed to support Industry 4.0. © 2018, Czestochowa University of Technology. All rights reserved.