ABSTRACT

This study explores the effect of Company Income Tax on the performance of companies in the food and beverage industry in Nigeria. Companies are subjected to tax under the provisions of the Company Income tax Act (1996). This has implications on their profit performance. Also the shareholders are interested not just on the profit performance of the company but on the proportion of this profit they are to receive as the return on invested capital in the form of dividends. The main objective of this study is to determine the effect of company income tax on the profit performance of companies in the food and beverage industry in Nigeria. Secondary data was collected and analyzed using simple regression. From the findings; the researcher discovered that company income tax has a significant effect on the profit performance of companies in the food and beverage industry in Nigeria at 5% level of significance. And in line with a prior expectation, company income tax has a significant effect on dividend payout at 1 % level of significance. The findings corroborate the works of Brennan (1970), Masulis and Trueman (1988) and, Fama and French (2001), and the researcher recommends a reduction in the current tax rate and increase in government tax incentives for companies in the food and beverage industry in Nigeria.