OWNERSHIP STRUCTURE AND CORPORATE TAX AGGRESSIVENESS OF PUBLIC LISTED MANUFACTURING FIRMS IN NIGERIA
Keywords:
Effective tax rate, Ownership structure, Tax aggressiveness.Abstract
This study examined the effect of ownership structure on tax aggressiveness using the ex-post facto research design. Specifically, the study sought to ascertain the effects of managerial ownership, ownership concentration, institutional ownership and foreign ownership on tax aggressiveness in listed manufacturing companies.This study deployed ex-post facto research design.The industrial goods sector was chosen as the focus of study and all fourteen listed companies in the sector constituted the sample size. Data were sourced from annual reports of sampled companies for 2009 to 2018 financial years. The random effects unbalanced panel regression technique were employed for analyses. Results revealed that managerial ownership was a significant predictor of tax aggressiveness at a p value of 0.01. The result of the study also reveals that management becomes more tax-aggressive when they hold a higher portion of shares in the firm. On the other hand, ownership concentration (p value of 0.37;F= 1.0621), institutional ownership (p value of 0.32;F= 1.1804) and foreign ownership (p value of 0.77;F= 0.3755) had insignificant effects. Overall, the study model revealed that ownership structure influences tax aggressiveness of firms. It was recommended that adequate compensation may be given to tactical management to reduce their tendency to engage in managerial opportunism through extreme tax aggressiveness. Firms may also engage the services of professional tax consultants to make utmost advantage of loopholes in tax laws so that tax aggressive practices are within the confines of the law.
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