ABSTRACT

The study examined the effect of corporate tax planning on the performance of listed manufacturing companies in Nigeria. The specific objectives of the study are; to examine the extent to which effective tax rate reconciliation affect return on asset of listed manufacturing firms in Nigeria, to determine the effect of tax incentives and exemptions on return on asset of listed manufacturing firms in Nigeria and to determine the effect of debt tax shield on return on asset of listed manufacturing firms in Nigeria. Ex-post facto research design was adopted. Secondary data was used through the use of annual reports and accounts of the selected manufacturing firms. The population of the study is made up of all the manufacturing firms listed in Nigeria stock exchange, while the sample size is made up of 10 listed manufacturing firms after adopting Taro Yamane formula. Data was analyzed using panel data regression analysis. The finding revealed that corporate tax planning components (effective tax rate, tax incentives, debt tax shields) have a positive but insignificant effect on financial performance of listed manufacturing firms in Nigeria. The study concludes that though tax planning affects the financial performance but to a minima extent. Hence, there are other factors that can really determine the performance of firms outside corporate tax planning. The study recommends that manufacturing firms should engage in tax planning and at the same time pay attention to other factors that can affect their performance. The study also recommends that manufacturing firms should run an analysis on the effect of debt tax shield on performance before making decision of increasing their debt in the name of increasing performance