Tax Planning Strategies and Firm Performance of Listed Non-Financial Companies in Nigeria

Abstract

This study examined tax planning strategies and firm performance of listed non-financial companies in Nigeria. It used a longitudinal research design and secondary source of data for 36 sample non-financial companies trading at the Nigeria Exchange Group which makes account to 31^st December each year. It covered an eight-year period dated 2015 to 2022. The study used descriptive methods to examine the characterization of variables and inferential statistical analytical technique to determine the reliability and predictive prowess of the model in enhancing judgment of acceptance or rejection of the null hypothesis using a panel least square regression method. The result revealed a positive relationship and significant impact of non-debt tax shield, tax shield with a positive relationship and a significant impact on firm performance. Capital intensity has a direct relationship and a positive impact on firm performance. Thin capitalization has an inverse relationship and a significant impact on firm performance of listed firms in Nigeria, Effective tax rate has a direct relationship and a significant impact on firm performance. Deferred tax does not have relationship with firm performance. Book tax difference has an inverse relationship and a significant impact on firm performance of listed non-financial companies in Nigeria. The study concluded that tax planning strategies and tax avoidance determined firm performance of listed non-financial companies in Nigeria. It also recommended that policy makers should create policy that enhances the subsidization of the cost of debt-financing for the companies operating in Nigeria, and also recommended policies to enhance corporate performance.