AAU Journal of Business and Law مجلة جامعة العين للأعمال والقانون

AAU Journal of Business and Law   مجلة جامعة العين للأعمال والقانون


The study aimed to measure the impact of tax incentives on investment in small enterprises in Palestine. The study identified the tax incentives that affect Palestinian investments which were stipulated in the Palestinian Income Tax Law number (8) of the year 2011 which was amended according to the Decree number (5) for the year (2015), as well as the Investment Promotion Law (1) for the year (1998) and its subsequent amendments, and among these incentives (tax incentives related to family exemptions, incentives related to tax brackets, incentives related to tax deductions, incentives related to expanding the tax base exemptions, incentives related to encouraging payment discounts, incentives related to investment promotion).

To achieve the objectives of the study, the analytical descriptive approach was used, and a questionnaire was developed to measure the fields and variables of the study. A sample of 377 small enterprises owners was randomly selected from the northern governorates of the West Bank (Tulkarem, Nablus, Jenin, Tubas, Salfit, Qalqilya). The questionnaires were then distributed and (365) valid responses were retrieved.

The study had the following results: There is a significant effect of tax incentives on investment in small enterprises in Palestine. The Income Tax Law and the Palestinian Investment Promotion Law Tax both provided for tax exemptions and benefits that are in line with the economic conditions of individuals, because the introduction of new tax incentives help investors save money, and thus give them the ability to invest their savings and encourage them to invest in small projects. The provided tax brackets are suitable for all individuals and achieve justice in taxation, and tax reductions affect investment and attract Investors. Moreover, the incentives related to encouragement discounts on paid amounts also encourage the taxpayers to pay the tax due on them in installments according to their situation, which encouraged investors to invest. The most important recommendations of the study include: Efforts should be made to increase incentives to encourage investors and direct them to less invested regions, as well as granting full exemptions for investments made in these regions which would help revitalize them and make them attractive for investment. Moreover, there is a need to have a specialized entity through which the investor can complete all the procedures related to his investment project, due to the complexity of current procedures. The researchers also recommend that business owners should be informed on the benefits and exemptions that they can obtain when they expand their investments or start new ones.