Effect Of Corporate Taxes On Performance Of Listed Breweries In The Nigerian Stock Exchange (2007-2016):- Ogbonna, Chiemela F

ABSTRACT

 This research was carried out with the objective to determine effect of corporate taxes on performance of listed breweries in the Nigerian stock exchange. The specific objectives are to determine the extent to which corporate taxes affect earnings per share, market price OI shares and volume of traded shares in the brewery sector of the Nigerian economy. Three research questions were asked, three null hypotheses were also formulated. Panel data were gathered from Nigerian Stock Exchange. A population of 7 breweries was covered and judgmental or purposive sample size of 5 breweries from 2007-2016 were selected. An Eviews 8 statistical package was used to analyze data on EPS, MPS and VTS as proxies to dependent variables. CIT, EDT and WHT are proxies to independent variable. Ordinary Least Squares (OLS) regression method was used to analyze the data. Three hypotheses were tested and results showed that, companies income tax have positive significant effect on EPS with p-value of 0.0000 less than 0.05%. The F-statistic p-value of 0.000000 less than 0.01 acceptance level and R of 52% show a fair relationship between the dependent and independent variables. This supports the justification of normality and variability of data distribution. The market price of shares was affected also by the association of companies income true and education tax in a positive manner, in exception of the withholding true, this is evident by the p-value of 0.0000 CIT and 0.0021 EDT less than 0.05% significant level. The R' value of 54% and F-statistic p-value of 0.000000 less than 0.01% show a fair relationship between the dependent and the independent variables, including the normality and variability of data distribution. All the corporate taxes studied affect the Volume of Traded Shares significantly. The evidence of this is justified by their p-values as 0.0005 CIT, 0.0578 EDT and 0.0043 WHT which is less than 0.05% significant level. Moreover, the CIT has positive effect on VTS judging from its beta coefficient, the R 2 value of 74% and F-statistic p-value of 0.000000 less than 0.01 significant level of acceptance and it shows a very high level of relationship between the dependent and independent variables, as well as the normality and variability cf data distribution. Therefore, we conclude that corporate taxes have significant effect on performance of listed breweries in the Nigerian Stock Exchange. The following recommendations were made; Government through National True Policy organ and private sectors should review CIT rate up from 30% to 35% on chargeable profit and EDT from 2% to 5% because, it will increase government revenue and promote the firms' image. Whereas, WHT should be reviewed downward from 10% to 5% on dividend payout since, it has negative effect on EPS and VTS at 10%. Companies in brewery sector should improve on the quality of their products and distribution strategies this will increase their market value. Government should perform up to expectations by providing basic infrastructural amenities in the society such as electricity, roads and security via taxpayers' money this will help firms save costs .