Abstract:
This study examined the impact of Taxation on Investment Decisions of the CSE' Listed
Manufacturing Companies in Sri Lanka, which is one of the central questions in both
public finance and development as it the leading source of business cycle volatility.
Currently, policy makers have made effort to impose more uniformity on corporate tax
policies as there is no empirical study exists to quantify the extent to which corporate
income tax have altered the structure of investment decisions. Therefore, as per the
study topic, the researcher has formulated two study objectives to attain the ultimate
objective of this research.
Here, the descriptive Research was used in this study which involved the analysis of
quantitative data. The data was the financial statements of 24 manufacturing companies
listed at the Colombo Stock Exchange, which was collected from 2015 to 2019' The
analysis for these secondary data was done using the STATA - 14 package, where the
panel regression analysis, panel correlation, descriptive statistics and some other tests
have used for that.
However, it has concluded that corporate taxation impacts investment decisions of the
manufacturing companies, where the overall impact of taxation assed with the corporate
taxes or income taxes, while the investment decisions measured based on long lived
assets of the companies as they are placed a major role on the corporate investments'
So, ferally the researcher recommends to the practitioners or the users to take the
advantage of depreciation tax shield, as the depreciation amount calculated each year
is used to reduce the amount of tax liability, which is the best way to save the corporate
funds for company investments by controlling income taxes
