Corporate Income Tax and Financial Performance of Deposit Money Banks in Nigeria

Emelenjor Austin Onwughai, Prof. Musa J. Success and Prof. Mathias Ofili
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Emelenjor Austin Onwughai: Department of Accountingfaculty of Management Sciences veritas University, Abuja Nigeria
Prof. Musa J. Success: Department of Accountingfaculty of Management Sciences veritas University, Abuja Nigeria
Prof. Mathias Ofili: Department of Accountingfaculty of Management Sciences veritas University, Abuja Nigeria

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 4, 1662-1676

Abstract: This study examines the effect of Company Income Tax (CIT) on the financial performance (ROA) of listed deposit money banks in Nigeria, with a particular focus on the moderating role of Firm Size in the CIT-ROA relationship. The study population comprises all 43 deposit money banks as published on the Central Bank of Nigeria’s website as at April 26, 2024. A sample of twelve banks was selected using a purposive sampling technique. The study covers a fifteen-year period from 2009 to 2023, utilizing secondary data extracted from the audited financial statements of the selected banks. Employing ex-post facto research design, pooled regression was used for the analysis. The findings reveal a statistically positive but insignificant relationship between CIT and ROA. However, with moderation, the CIT-ROA relationship was found to be negative and significant. The study recommends banks should adopt effective tax planning by leveraging incentives and deductions while ensuring compliance. This will help enhance profitability and improve ROA without risking regulatory penalties. Policymakers should review tax policies for larger banks, as CIT negatively impacts their financial performance. Introducing tiered tax rates or industry-specific incentives can promote growth and stability.

Date: 2025
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