The Impact of Tax Rates on the Profitability of Listed Oil and Gas Multinational Firms in Nigeria

Iheanyichukwu Emmanuel Nkwa, Taofiq Olasunkanmi Yusuff, Oluwatosin Emmanuel Oladetan, Benjamin Onolememhen Asotie, Jide Sunday Oyewole and Grace Ogechi Ejike
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Iheanyichukwu Emmanuel Nkwa: Department of Business Administration, Faculty of Management Science, Federal University Otuoke Bayelsa, Nigeria.
Taofiq Olasunkanmi Yusuff: Department of Marketing, Faculty of Management Science, Yaba College of Technology Yaba, Nigeria.
Oluwatosin Emmanuel Oladetan: Department of Management, Universidad Católica San Antonio de Murcia (UCAM), Spain.
Benjamin Onolememhen Asotie: Department of Medicine, Ambrose Alli University, Ekpoma, Nigeria.
Jide Sunday Oyewole: Department of Accounting, Faculty of Education, Ekiti State University, Nigeria.
Grace Ogechi Ejike: Department of Accountancy, School of Financial Studies, Federal Polytechnic Bida, Nigeria.

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Abstract: This research work examines the tax rate and profitability of multinational firms in Nigeria using the Multinational Oil Firms in Nigeria. The study's population comprises the top five multinational oil and gas firms listed in Nigeria, namely Shell, Chevron, ExxonMobil, AGIP, and Total. A census sampling method was adopted for this study. The data used are gathered from the published annual statement of accounts of the companies for a decade, covering the period from 2011 to 2020. The Autoregressive Distributed Lag (ARDL) model was utilized as the technique for data analysis. Based on the results of the study: (1) H01 Marginal Tax Rate (MTR) on the short run has a negative and non-significant effect on Return on assets (ROA) with a p-value of 0.3940, (2) H02 Effective Tax Rate (ETR) on the short run has a positive and non-significant effect on Return on assets (ROA) with a p-value of 0.5976, (3) On the long run according to the result of the study; Effective Tax rate (ETR) has a negative and significant effect. Therefore, the study recommends that the relevant tax authorities should formulate tax reforms that would result in low taxation return rates, especially the statutory tax rate, as it is observed that there are tax incidence rates on the profitability of multinational firms. Based on these findings, the study recommends that policymakers prioritize stable and predictable tax regimes to foster a conducive environment for investment and sustainable corporate growth in Nigeria.

Date: 2025-11-25
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Published in Journal of Global Economics, Management and Business Research, 2025, 17 (3), pp.427-436

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05382795

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