Abstract: A Tax is a fee charged or levied by a Government on a product, income, or activity. It is levied on individuals or on goods or services, and then it is called an indirect tax. The main reason for taxation is to finance government expenditure and to redistribute wealth which translates to financing development of the country (Ola, 2001, Bhartia, 2009). The study of the relationship between tax incentives and the performance of the firms, has known a peak during these last decades, mainly with the works of Yonah (2006) and Gurria (2009). As a tool of government policy, tax incentives can be adopted to attract investors who want to increase the profitability of their businesses to promote investment, foster growth and survival of the company. The effect of corporate taxes on performance of companies is one of the central questions in both public finance and development. The manufacturing sector of any economy is considered to be very important as it contribution to the growth of the economy reflects visibly in job creation and improved tax contribution. The liberalization of the Nigerian economy through various home grown and other supporting international policy prescriptions over the past decades changed the structure of the manufacturing sector in Nigeria. The challenges of the manufacturing sector come in a midst of high corporate tax rates.