ABSTRACT

Taxation is one of the major instruments used in regulating the economy and raising revenue for the government is a significant purpose of taxation. Corporate tax is the tax imposed on the profits of companies, this work consider whether or not company tax has a favourable impact on corporate earnings and company's growth in Nigeria. On this basis two hypothesis were formulated and tested to ascertain their validity or otherwise. The data for this research were collected only from secondary sources. The data collected were analyzed using descriptive statistics like tables and percentages and regression analysis. From the analysis of the data, the following findings were made: Company income tax has an inverse significant relationship with corporate earnings. There is a significant relationship between company income tax and corporate earnings. The rate of tax evasion and avoidance is high in Nigeria. The existing company income tax rate is high. Company income tax contribution to federally collected non-oil revenue is low. Based on the findings above, the researcher therefore concluded that company income tax exert a significant effect on both corporate earnings and corporate growth. That is to say an increase in company income tax favours economic development while a decrease in company income tax favours corporate earning and encourages saving and investment opportunities. However a few recommendations were made based on the findings; government should device a good mechanism for calculating and collecting tax from companies as at when due to help eliminate or reduce tax avoidance and evasion rate. Government should also ensure that revenue generated from company income tax and other forms of tax is judiciously utilized so as to encourage tax payers, tax avoiders and tax evaders. Government should also review existing company tax to enable existing companies have a sound and adequate financial base in other to achieve their set target and developmental objectives.