CORPORATE TAX PLANNING AND FINANCIAL PERFORMANCE OF LISTED FOOD AND BEVERAGES COMPANIES IN NIGERIA
Siyanbola, Trimisiu Tunji and Durosinmi, Taoreed Abiodun
Volume 5 Issue 2
Abstract
Despite the utilisation of tax planning to optimise financial performance by companies in developed and second world countries, Nigeria companies especially the food and beverages sector have over the years experienced higher corporate tax liabilities which have negatively impact the ability of Nigerian firms to generate profits, stifling growth and limiting the reinvestment of retained earnings into the business. This study therefore sought to examine the effect of corporate tax planning on financial performance of listed food and beverages companies in Nigeria. The study adopted an ex-post facto research design. The population of the study consists of 15 listed food and beverages companies in Nigeria. Secondary data were extracted from the Annual Report and Accounts of 10 sampled companies from 2014 – 2023. Data were analysed using descriptive, inferential statistics, and regression. Findings from the study revealed that corporate tax planning significantly affect TBQ (P = 0.000000). Also, firm and leverage significantly control the relationship between corporate tax planning and TBQ (p = 0.000000). The study recommended that managers of food and beverages companies in Nigeria should carefully manage their Capital Intensity to avoid over-leveraging while still utilising the benefits of debt financing. Companies can implement debt restructuring strategies, reducing interest costs and spreading out repayment schedules to manage financial risk effectively. Keywords: Capital Intensity, Effective Tax Rate, Thin Capitalisation, and Tobin’s Q.
Download Paper