Tax planning instruments and corporate financial performance of listed industrial goods companies in Nigeria

Abstract

Corporate tax planning has attracted attention of academics and has inevitably become a notable factor that enhances firm’s corporate performance. This paper examined the impact of corporate tax planning on the financial performance of listed industrial goods companies in Nigeria. The study used ex-post factor design and utilized panel data. The population of the study consists of twelve (12) industrial goods firms quoted on the Nigerian Exchange Group (NGX) for the period ending 31st December, 2022 and a sample size of six (6) industrial goods firms quoted were selected using a backward filtration process in terms of date of listing commencing from year 2012 backward. Data for the study were collected using secondary source, derived from the annual reports and audited accounts of the selected companies. Data for a period of ten (10) years were collected and analyzed via STATA 14 version. This study used descriptive statistics and regression analysis (OLS) as methods for data analysis. Findings reveals that Capitalization is negative and insignificantly associated with financial performance of listed industrial goods firms, whereas; Research and Development expenditure is positive but insignificantly associated with financial performance of listed industrial goods firms in Nigeria. Premised upon this, the study recommends that companies should improve their financial performance through diversification of their products (thus; making investments in other high-yield assets with tax incentives) and also engage in corporate social responsibility activities.