Effect of Tax Savings Strategies on the Financial Performance of Listed Manufacturing Companies in Nigeria
Year: 2026
Type: article
Abstract: This study investigated the effect of tax saving strategies on the financial performance of listed manufacturing companies in Nigeria. An ex-post facto research design was adopted for the study. Data were obtained from secondary sources, specifically the annual reports of three selected listed manufacturing companies over a period of ten years, resulting in 30 observations. The variables used for the analysis included Return on Assets (ROA) as the dependent variable, while Effective Tax Rate (ETR), Debt-to-Equity Ratio (DER), and Capital Intensity (CI) served as the explanatory variables. The data were analysed using regression analysis with the aid of the Statistical Package for Social Sciences (SPSS). The findings revealed that Effective Tax Rate had no significant relationship with the return on assets of listed manufacturing companies in Nigeria. In contrast, thin capitalisation showed a significant relationship with return on assets, while capital intensity was found to have no significant relationship with return on assets. Based on these findings, the study concluded that tax saving strategies can influence the financial performance of manufacturing firms, although the extent of such influence varies across the different tax-related measures considered. Accordingly, the study recommended that organisations should not rely solely on tax planning as a strategy for improving performance. Rather, they should also strengthen other key areas such as operational efficisency, cost control, product innovation, and market expansion in order to achieve more sustainable improvements in profitability and overall corporate growth. Keywords: Thin Capitalisation, Capital Intensity, Effective Tax Rate, Tax Savings Strategies.
DOI: 10.67199/g1kvcm78
Institution: University of Calabar
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W7225429632