CORPOARTE TAX AND FINANCIAL PERFORMANCE OF DEPOSIT MONEY BANK IN NIGERIA (EMPIRICAL STUDY OF FIRST BANK OF NIGERIA LIMITED)

ABSTRACT The aim of this study was to focus on corporate tax and financial performance of deposit money banks in Nigeria: Empirical Evidence of First Bank Plc. Ex-post facto and survey research designs were adopted in the study. Primary and secondary methods of data collection were used in gathering relevant data for this research work. The primary source adopted was the use of administered questionnaire while the secondary source adopted was the use of financial statement from First Bank Plc. Judgment sampling technique was used to select a sample size of twenty-five (25) respondents for the study. Data were collected, coded and analyzed. Percentages and frequency tables were used to analyze the responses from respondents. The hypothesis was tested using the regression analysis model. The hypothesis revealed that there is no significant correlation between corporate tax and financial performance of deposit money banks in Nigeria. The findings also revealed that corporate income tax (CIT) influences the profitability of First Bank Plc through its impact on the company’s pricing strategies and cost structure, thus reducing its profit after tax and the resources available to pay dividends. The study also revealed that education tax (EDT) influences the profitability of the company by reducing its profit after tax, the amount of profit available for distribution to shareholders, as well as resources available for other social responsibilities. Finally, the study revealed that capital gains tax (CGT) affects the profitability of First Bank of Nigeria Limited by reducing profit after tax, the amount of profit available for distribution to shareholders, and the profit available for other social responsibilities. The study concluded that when businesses make profit and pay lower taxes, they will have enough funds to reinvest and expand. This leads to increased employment opportunities and improvement in the economy of the country. The reverse is the case when tax rates are high and there are no adequate tax incentives to reduce the tax burden on firms.