ABSTRACT

Despite the fact that Income tax administration was enacted to promote Small Business Enterprises, they have continued to perform poorly which has triggered this research on effect of tax revenue on the profitability ofbusiness organization in Abia State. The research formulated four specific objectives; to evaluate the effect ofthe income tax on profit after tax ofthe selected firms in Abia State, to evaluate the effect ofthe income tax on return on asset ofthe selectedfirms in Abia State and to evaluate the effect ofthe income tax on netprofit margin ofthe selectedfirms in Abia State. Thus, research questions and research hypotheses were structured in accordance with the specific objectives. In a bid to achieve a meaningful research study work, this research will review related literatures on the effect oftax revenue on the profitability which were subdivided into three subheadings such conceptualframework, theoreticalframework and empirical review. However, in the quest to perfect this research; ex-facto research design was adoptedwere data was sourced secondarily through annual report of 7up bottling company PLC, Nigeria Breweries which serves as the instrument. The data sourced covered the range of2007 - 2017. Simple regression statistical technique based on E-view 8 was used to analyze the data collected. Thus, the followingfindings were made based on the analysis that income tax has a significant impact on profit after tax of7up bottling company PLC, Nigeria Breweries, that company income tax has a significant impact on return asset of7up bottling company PLC, Nigeria Breweries and that income tax has a significant impact on return capital employed of7up bottling companyPLC, Nigeria Breweries. Sequel to the findings and conclusion, the research made the following recommendations that 7up bottling company PLC, Nigeria Breweries and other manufacturing companies should employ the services oftax experts to aid them in taxplanning in other to reduce the net taxpayment so as to increase theirfinancialprofitability. That 7up bottling company PLC and Nigeria Breweries and other manufacturing companies should increase their asset size and ensure efficient use ofthose assets to reflect in the production turnover ofthe companies. Finally, it is recommended that government should reduce corporate tax rate because a reduction in the corporation tax rate will increase the income to shift toprofits which will directly has an effect on the return on capital. Thus, investors are encouraged through increase in dividendpaid out.