Effect of Taxation Management on Financial Performance of Listed Consumer Goods in Nigeria

Abstract

This study aimed to examine the effect of tax management on the financial performance of listed consumer goods companies in Nigeria. The research design used for this study was ex post facto, and the time frame covered 12 years from 2011 to 2022. The study used return on assets as a proxy. Tax expense and deferred tax liabilities were used as proxies to measure tax management. Revenue was included as a control variable. The study collected data from 15 listed consumer goods firms, comprising the selected sample out of 22 firms. The data was analyzed using descriptive statistics, correlation analysis, variance inflation factors, Hausman specification tests, and regression analysis. The random effect method of regression was employed. The study found that tax expenses had a positive and statistically significant effect on the return on assets. The study also found a statistically significant but negative effect of deferred tax liabilities on the financial performance of sample firms. The study concluded that taxation management was significant in determining the financial performance of listed consumer goods firms in Nigeria. The study recommended increased management of taxation to improve financial performance. The study also recommended tax-based training for firms' accounting staff. The study also recommended that all firms should have tax management subcommittees on the board.