CORPORATE GOVERNANCE AND TAX AGGRESSIVENESS: EVIDENCE FROM NIGERIA

ABSTRACT This study examines the impact of corporate governance mechanisms on tax aggressiveness among listed non-financial firms in Nigeria. Growing concerns about unethical tax practices and weak governance structures have intensified debates on the role of boards, ownership structures, and monitoring committees in curbing aggressive tax behavior. The research specifically investigates how board independence, audit committee effectiveness, ownership structure, and board gender diversity influence corporate tax aggressiveness, with firm size and leverage introduced as control variables. Adopting an ex-post facto research design, the study relies on secondary data extracted from the annual reports of sampled firms listed on the Nigerian Exchange Group (NGX) between 2015 and 2024. Tax aggressiveness was proxied using effective tax rates (ETR) and book–tax differences (BTD), while panel regression analysis was employed to test the hypothesized relationships. The findings reveal that board independence, audit committee effectiveness, ownership structure, and gender diversity are negatively and significantly associated with tax aggressiveness, suggesting that strong governance mechanisms reduce the likelihood of opportunistic tax practices. In contrast, firm size and leverage exhibit positive and significant effects, indicating that larger and more leveraged firms are more inclined to adopt aggressive tax strategies. These results underscore the paradox of governance effectiveness in Nigeria, where robust monitoring reduces tax aggressiveness, but structural firm characteristics increase its prevalence. The study concludes that corporate governance remains a vital tool for curbing tax aggressiveness and ensuring accountability in Nigerian firms. It recommends stronger enforcement of governance codes, enhanced audit committee functionality, and greater emphasis on board diversity to strengthen ethical tax practices. Furthermore, regulators should closely monitor large and highly leveraged firms, while policymakers should enact tax reforms that reduce loopholes and disincentivize aggressive tax planning.