ABSTRACT
The study examined corporate tax planning and financial
performance of listed consumer goods firms in Nigeria. To achieve the objective
of the study, ex-post facto research design was adopted. The population of the
study is made up of 21 consumer goods firms listed in Nigeria exchange groups
while sample size is made of 14 listed firms after adopting judgmental sampling
for the period 2012-2022. Data were sourced from annual report and accounts of
the selected firms. The data collected were analyzed using multiple regression
analysis and moderated regression analysis (MRA). The findings revealed that (i)
Effective tax rate has an insignificant effect on return on asset of listed
consumer goods firms in Nigeria. (ii) Tax incentives and exemption do not
significantly affect return on asset of listed consumer goods firms in Nigeria.
(iii) Effective tax rate does not have any significant effect on earnings per
share of listed consumer goods firms in Nigeria. (iv) Tax incentives and
exemption significantly affect earnings per share of listed consumer goods
firms in Nigeria. (v) Debt tax shield insignificantly moderate the association
between corporate tax planning and return on asset of listed consumer goods
firms in Nigeria. (vi) Debt tax shield insignificantly moderate the association
between corporate tax planning and earnings per share of listed consumer goods
firms in Nigeria. Based on the findings, the study recommended that management
of consumer goods firms must do an extensive analysis of the costs and benefits
associated with tax planning such as effective tax rate before engaging in the
activities. These include the tax savings benefit from tax planning, cost of
executing the strategy, the risk of detection by the tax authorities and the
penalty that may be imposed by the authority. Failure to do so will have a negative
effect on return on asset of consumer goods firms in Nigeria. The study also
recommends that consumer goods firms should do a proper capital structure
evaluation to know whether debt financing is more profitable to their business
considering the fact that debt financing has the advantage of reducing tax
payment. In some cases, irrespective of the advantage of debt financing towards
tax planning, equity financing can be more profitable to the business.
Therefore, lack of proper evaluation of firm’s capital structure before
adopting debt financing could cause more harm to the company than reducing tax
rate.
CHINWENDU, J (2024). Corporate Tax Planning and the financial Performance of Listed Consumer Goods Firms in Nigeria:- Obizuo, Chinwendu J. Repository.mouau.edu.ng: Retrieved Sep 08, 2024, from https://repository.mouau.edu.ng/work/view/corporate-tax-planning-and-the-financial-performance-of-listed-consumer-goods-firms-in-nigeria-obizuo-chinwendu-j-7-2
JUDITH, CHINWENDU. " Corporate Tax Planning and the financial Performance of Listed Consumer Goods Firms in Nigeria:- Obizuo, Chinwendu J" Repository.mouau.edu.ng. Repository.mouau.edu.ng, 22 Jul. 2024, https://repository.mouau.edu.ng/work/view/corporate-tax-planning-and-the-financial-performance-of-listed-consumer-goods-firms-in-nigeria-obizuo-chinwendu-j-7-2. Accessed 08 Sep. 2024.
JUDITH, CHINWENDU. " Corporate Tax Planning and the financial Performance of Listed Consumer Goods Firms in Nigeria:- Obizuo, Chinwendu J". Repository.mouau.edu.ng, Repository.mouau.edu.ng, 22 Jul. 2024. Web. 08 Sep. 2024. < https://repository.mouau.edu.ng/work/view/corporate-tax-planning-and-the-financial-performance-of-listed-consumer-goods-firms-in-nigeria-obizuo-chinwendu-j-7-2 >.
JUDITH, CHINWENDU. " Corporate Tax Planning and the financial Performance of Listed Consumer Goods Firms in Nigeria:- Obizuo, Chinwendu J" Repository.mouau.edu.ng (2024). Accessed 08 Sep. 2024. https://repository.mouau.edu.ng/work/view/corporate-tax-planning-and-the-financial-performance-of-listed-consumer-goods-firms-in-nigeria-obizuo-chinwendu-j-7-2