TAX AGGRESSIVENESS AND FINANCIAL PERFORMANCE OF LISTED MANUFACTURING FIRMS IN NIGERIA
Abstract
ABSTRACT
This study investigates the impact of tax aggressiveness on the financial performance of listed manufacturing firms in Nigeria. The main objectives of the study are to examine the effect of the GAAP effective tax rate, the cash effective tax rate, and leverage on the financial performance of these firms. A correlational research design, utilizing panel data and Ordinary Least Squares (OLS) regression, was employed to analyze the relationships between tax aggressiveness and financial performance. The study reveals that the GAAP effective tax rate has a significant influence on financial performance, with higher tax aggressiveness potentially reducing profitability. Similarly, the cash effective tax rate was found to significantly affect financial performance, suggesting that more aggressive tax strategies may not always yield positive financial outcomes. Additionally, the study explores the role of leverage, finding a notable relationship between the firm’s debt levels and its financial performance. The findings underscore the complex interplay between tax strategies and financial outcomes, offering insights for policymakers and corporate managers seeking to optimize tax planning within the manufacturing sector in Nigeria.
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