TAX ADMINISTRATION AND FINANCIAL PERFORMANCE IN SELECTED NIGERIAN QUOTED COMPANIES

ABSTRACT This study investigated tax management and financial performance in selected Nigerian quoted companies. The study measured tax management by effective tax rate and financial performance were measured by earning per shares, return on assets and return on equity. Data were collected from secondary source through the annual reports and accounts of the firms from the total population of two hundred and six (206) listed companies on the Nigerian Stock Exchange as at 31 December 2019 from which a comprehensive panel data set of ten (10) companies were scientifically selected over a period of four (4) years spanning from 2016 to 2019. Data collected in the study were analysed by descriptive statistics, correlation matrix and ordinanry least square regression techniques. The result of the random effect estimation model revealed that tax management had positive and significant effect on return on asset and return on equity in Nigerian listed companies. In addition, the random effect estimation model revealed that tax management had negative and significant effect on earnings per share in Nigerian listed companies. Tax management was found to have positive and significant effect on the control variables firm size and firm leverage in Nigerian listed companies. The study recommended that the directors should ensures that proper governance mechanisms are in place such as supervision and control if they are to benefit from tax management and utilize the tax savings gained for the enhancement of the firm’s profitability situation, government should ensure the institutions are strengthened in order to effectively and efficiently get companies to pay taxes and constantly update itself to remain relevant in the midst of the ever aggressive tax payer, and the tax payment system should be made as simple as possible by the government to encourage tax payer compliance, this will minimize tax management by the Nigerian listed companies.