BOARD ATTRIBUTES AND TAX PLANNING OF LISTED NON-FINANCIAL COMPANIES IN NIGERIA

Zachariah Peter, Tahir Kabir Hamid and Mohammed Ibrahim
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Zachariah Peter: Federal University, Wukari, Postal: Department of Accounting, , Nigeria, http://www.icanig.org/
Tahir Kabir Hamid: Bayero University, Kano, Postal: Department of Accounting, , Nigeria, http://www.icanig.org
Mohammed Ibrahim: Gombe State University, Postal: Department of Accounting, , Nigeria, http://www.icanig.org

International Journal of Contemporary Accounting Issues-IJCAI (formerly International Journal of Accounting & Finance IJAF), 2020, vol. 09, issue 1, 130-146

Abstract: This study examined the effects of board attributes on tax planning of listed non-financial companies in Nigeria. It aims at finding out using quantitative research method, board attributes that increase tax planning, thus, reducing tax liability of listed non-financial firms in Nigeria. Data for the study were collected from the annual reports and accounts of the sampled companies for a period of ten years (2008 to 2017). The data collected were analysed using descriptive statistics to provide summary statistics for the variables, and correlation analysis was carried out using Pearson product-moment correlation to determine the relationship between the dependent and independent variables. Regression analysis was also conducted. The study revealed that board independence has a significant negative effect on tax planning; foreign directorship has a non-significant negative effect, while gender diversity, board size, and board meetings have non-significant positive effect on tax planning in listed non-financial companies in Nigeria. In addition, profitability has a significant positive effect on tax planning as leverage depicts significant negative effect on tax planning. The study is limited to non-financial companies in Nigeria; hence, the findings are useful to the stakeholders of those companies. In addition, the findings can be generalized to emerging economies that have similar economy, politics, and code of corporate governance with Nigeria. The findings imply that having independent and foreign directors on the board of directors increase tax planning, thereby reducing tax liabilities. Therefore, independent and foreign directors have similar ideas towards tax planning. Also, board size, gender diversity, and board meetings do not contribute towards tax reduction via tax planning activities. Findings from this study contribute to the literature on corporate governance and tax planning in Nigeria by encouraging management of listed firms to be more proactive in tax planning. Theoretically, the study is significant for its contribution to agency and stakeholder theories as they explain relationship between board attributes and tax planning.

Keywords: Board independence; board size; gender diversity; foreign directors; tax planning (search for similar items in EconPapers)
Date: 2020
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