CORPORATE GOVERNANCE STRUCTURE AND TAX PLANNING: NEW EVIDENCE FROM NON-FINANCIAL FIRMS IN NIGERIA

Ajao, Oladimeji Oluseyi; Nwaiwu, Johnson Nkem; Ironkwe, Uwaoma Ignatius

Authors

Ajao, Oladimeji Oluseyi Department of Accounting, Faculty of Management Sciences, University of Port Harcourt, Choba, Port Harcourt
Nwaiwu, Johnson Nkem Department of Accounting, Faculty of Management Sciences, University of Port Harcourt, Choba, Port Harcourt
Ironkwe, Uwaoma Ignatius Department of Accounting, Faculty of Management Sciences, University of Port Harcourt, Choba, Port Harcourt

Keywords:

Board characteristics, ownership structure, effective tax rate, tax planning, corporate governance mechanism.

Abstract

In many country, it appears the government is not even bothered about this global financial termite and the judicial pronouncements follows those of many common law jurisdictions in spite of the fact that tax revenue to gross domestic product is among the lowest in the world. This study empirically examines this controversial relationship within the Nigerian context. Time series data on different types of corporate governance structure and tax planning, were collected from Central Bank of Nigeria Statistical bulletin, annual reports of Central Bank of Nigeria, National Bureau of Statistics, Nigeria revenue Service. Spanning from 2014-2023 ordinary least square regression analysis, descriptive statistics, stationarity test, Hausaman test, lagrange multiplier test, cointegration test and error correction model with the aid of E-view version 12 to test both short and long run dynamics. The results revealed that board characteristic ownership structure, regulatory and compliance committee positively and significantly relate with effective tax rate. The study concluded that governance structures play a critical role in shaping tax planning strategies and recommends that regulators strengthen governance frameworks to balance the benefits of effective tax rate with the need for fiscal transparency.