FIRM SPECIFIC FACTORS AND CORPORATE TAX AGGRESSIVENESS AMONG LISTED MANUFACTURING FIRMS IN NIGERIA

Abstract

Corporate tax aggressiveness remains a significant challenge to government revenue generation in Nigeria, particularly given the country's heavy reliance on corporate taxes. The problem is more pronounced among manufacturing firms, whose capital structures, asset compositions, and governance arrangements may provide opportunities for aggressive tax practices. This study investigates the effect of firm-specific factors on corporate tax aggressiveness among listed manufacturing firms in Nigeria. The study employs an ex post facto research design and utilizes secondary data extracted from the annual reports and audited financial statements of sampled listed manufacturing firms over a ten-year period spanning 2014 to 2023. The population comprises all 34 listed manufacturing firms in Nigeria, from which a sample of 17 firms was purposively selected based on data availability. Corporate tax aggressiveness was proxy using the effective tax rate. Panel data regression analysis was employed, with Panel-Corrected Standard Errors (PCSEs) used to address heteroskedasticity and autocorrelation, alongside relevant diagnostic tests. The findings reveal that Capital intensity has a positive and significant effect on the effective tax rate (β = 0.185, p = 0.002), implying that firms with higher capital intensity exhibit lower levels of tax aggressiveness while financial distress shows a positive but insignificant effect (β = 0.024, p = 0.392). Leverage also has a positive and significant influence on tax aggressiveness (β = 0.143, p = 0.010). The study concludes that corporate tax aggressiveness among listed manufacturing firms in Nigeria is largely driven by capital intensity and leverage rather than financial distress. It therefore recommends that tax authorities strengthen monitoring of capital allowances, and leverage-related tax incentives, while corporate boards and auditors should promote transparency and responsible tax practices to balance tax efficiency with compliance.