CORPORATE TAX PLANNING INSTRUMENT AND FINANCIAL PERFORMANCE OF LISTED CONSUMER GOODS COMPANIES IN NIGERIA

Abstract

The rationale beyond the study was to examine the association between corporate tax planning instrument and financial performance of listed consumer goods companies in Nigeria. The specific objectives were to examine the extent of relationship among the three major variables of tax planning techniques such as thin capitalization, Effective tax rate and Book tax difference. The study adopted ex-post facto research design. The study population was culled from twenty-one consumer goods sector of the Nigerian Exchange Group (NGX) as at the end of 2024 trading year. purposive sampling technique was used to select five consumer goods companies. The study data were sourced from Financial Statement of the studied consumer companies. The findings of the study revealed that thin capitalization has negative and significant effect on return on assets of listed consumer good companies in Nigeria, effective tax rate has positive and insignificant effect on return on assets of listed consumer good companies in Nigeria and book tax difference has positive and insignificant effect on return on assets of listed consumer good companies in Nigeria. In conclusion, while corporate tax planning can be a useful tool for managing costs and enhancing profitability of a particular consumer goods company, its effectiveness is contingent on how responsibly and strategically it is implemented. It was recommended that the management of the said companies in Nigeria should minimized excessive debt levels, and regulators should also enforce appropriate leverage rules, and policies that supports access to equity and low-cost financing.