Profitability has been the aim of every commercial enterprise but are often not actualized due to high costs and high Effective Tax Rates (ETR). In order to manage the effects of taxes on the profitability of firms, strategies are employed to plan the taxes. This research work focused on effect of Tax Planning Strategies on Profitability of manufacturing firms in Nigeria. Ex-post facto research design was adopted for the study. The main objective of the study was to examine the effect of Tax Planning Strategies on Profitability of Quoted Manufacturing Companies in Nigeria. The population of the Study comprised of 52 manufacturing companies quoted on the Nigeria Stock Exchange as at 17th December, 2018 with 46 as the sample size calculated using Taro Yamani’s formula. Data were collected from the audited annual reports of the sampled companies for a period of 10 years (2008 – 2017). The validity and reliability were based on the statutory audit of the financial statements. Descriptive and inferential statistics were used to analyze the data. The result revealed that there is no significant effect of TP on Return On Assets (ROA) of Quoted Manufacturing Companies in Nigeria. This is evidenced by the results of the test, Adj.R2 = -0.000527 and F-Statistics = 0.919439 and P-value of 0.431292. The Study concluded that tax planning strategies have both negative and positive effects on profitability of Quoted Manufacturing Companies in Nigeria. The study recommended that Tax Managers and Finance Officers should reduce thin capitalization and Capital Intensity to balance the source of income of manufacturing firms, while Research and Development costs should be properly managed to increase their contributions to profitability. Professional Tax Practioners should also be consulted for maximum benefit from tax planning.
| Published in | Journal of Finance and Accounting (Volume 8, Issue 3) |
| DOI | 10.11648/j.jfa.20200803.16 |
| Page(s) | 148-157 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2020. Published by Science Publishing Group |
Capital Intensity, Effective Tax Rate, Profitability, Tax Planning Strategies, Tax Practioners, Thin Capitalization, Research and Development Costs
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APA Style
Ishola Rufus Akintoye, Folajimi Festus Adegbie, Chimeruo Victory Onyeka-Iheme. (2020). Tax Planning Strategies and Profitability of Quoted Manufacturing Companies in Nigeria. Journal of Finance and Accounting, 8(3), 148-157. https://doi.org/10.11648/j.jfa.20200803.16
ACS Style
Ishola Rufus Akintoye; Folajimi Festus Adegbie; Chimeruo Victory Onyeka-Iheme. Tax Planning Strategies and Profitability of Quoted Manufacturing Companies in Nigeria. J. Finance Account. 2020, 8(3), 148-157. doi: 10.11648/j.jfa.20200803.16
AMA Style
Ishola Rufus Akintoye, Folajimi Festus Adegbie, Chimeruo Victory Onyeka-Iheme. Tax Planning Strategies and Profitability of Quoted Manufacturing Companies in Nigeria. J Finance Account. 2020;8(3):148-157. doi: 10.11648/j.jfa.20200803.16
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Download@article{10.11648/j.jfa.20200803.16,
author = {Ishola Rufus Akintoye and Folajimi Festus Adegbie and Chimeruo Victory Onyeka-Iheme},
title = {Tax Planning Strategies and Profitability of Quoted Manufacturing Companies in Nigeria},
journal = {Journal of Finance and Accounting},
volume = {8},
number = {3},
pages = {148-157},
doi = {10.11648/j.jfa.20200803.16},
url = {https://doi.org/10.11648/j.jfa.20200803.16},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20200803.16},
abstract = {Profitability has been the aim of every commercial enterprise but are often not actualized due to high costs and high Effective Tax Rates (ETR). In order to manage the effects of taxes on the profitability of firms, strategies are employed to plan the taxes. This research work focused on effect of Tax Planning Strategies on Profitability of manufacturing firms in Nigeria. Ex-post facto research design was adopted for the study. The main objective of the study was to examine the effect of Tax Planning Strategies on Profitability of Quoted Manufacturing Companies in Nigeria. The population of the Study comprised of 52 manufacturing companies quoted on the Nigeria Stock Exchange as at 17th December, 2018 with 46 as the sample size calculated using Taro Yamani’s formula. Data were collected from the audited annual reports of the sampled companies for a period of 10 years (2008 – 2017). The validity and reliability were based on the statutory audit of the financial statements. Descriptive and inferential statistics were used to analyze the data. The result revealed that there is no significant effect of TP on Return On Assets (ROA) of Quoted Manufacturing Companies in Nigeria. This is evidenced by the results of the test, Adj.R2 = -0.000527 and F-Statistics = 0.919439 and P-value of 0.431292. The Study concluded that tax planning strategies have both negative and positive effects on profitability of Quoted Manufacturing Companies in Nigeria. The study recommended that Tax Managers and Finance Officers should reduce thin capitalization and Capital Intensity to balance the source of income of manufacturing firms, while Research and Development costs should be properly managed to increase their contributions to profitability. Professional Tax Practioners should also be consulted for maximum benefit from tax planning.},
year = {2020}
}
TY - JOUR T1 - Tax Planning Strategies and Profitability of Quoted Manufacturing Companies in Nigeria AU - Ishola Rufus Akintoye AU - Folajimi Festus Adegbie AU - Chimeruo Victory Onyeka-Iheme Y1 - 2020/06/17 PY - 2020 N1 - https://doi.org/10.11648/j.jfa.20200803.16 DO - 10.11648/j.jfa.20200803.16 T2 - Journal of Finance and Accounting JF - Journal of Finance and Accounting JO - Journal of Finance and Accounting SP - 148 EP - 157 PB - Science Publishing Group SN - 2330-7323 UR - https://doi.org/10.11648/j.jfa.20200803.16 AB - Profitability has been the aim of every commercial enterprise but are often not actualized due to high costs and high Effective Tax Rates (ETR). In order to manage the effects of taxes on the profitability of firms, strategies are employed to plan the taxes. This research work focused on effect of Tax Planning Strategies on Profitability of manufacturing firms in Nigeria. Ex-post facto research design was adopted for the study. The main objective of the study was to examine the effect of Tax Planning Strategies on Profitability of Quoted Manufacturing Companies in Nigeria. The population of the Study comprised of 52 manufacturing companies quoted on the Nigeria Stock Exchange as at 17th December, 2018 with 46 as the sample size calculated using Taro Yamani’s formula. Data were collected from the audited annual reports of the sampled companies for a period of 10 years (2008 – 2017). The validity and reliability were based on the statutory audit of the financial statements. Descriptive and inferential statistics were used to analyze the data. The result revealed that there is no significant effect of TP on Return On Assets (ROA) of Quoted Manufacturing Companies in Nigeria. This is evidenced by the results of the test, Adj.R2 = -0.000527 and F-Statistics = 0.919439 and P-value of 0.431292. The Study concluded that tax planning strategies have both negative and positive effects on profitability of Quoted Manufacturing Companies in Nigeria. The study recommended that Tax Managers and Finance Officers should reduce thin capitalization and Capital Intensity to balance the source of income of manufacturing firms, while Research and Development costs should be properly managed to increase their contributions to profitability. Professional Tax Practioners should also be consulted for maximum benefit from tax planning. VL - 8 IS - 3 ER -
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