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Effect of Corporate Taxation on the Profitability of Firms in NIGERIA

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  • Olaoye Clement Olatunji
  • Alade Elizabeth Oluwatoyin

Abstract

The paper examined the effect of corporate taxation on the profitability of some selected firms in Nigeria from 2007 to 2016 using secondary data which was sourced from various publications of the firms’ financial report. The study employed pooled ordinary least square as the estimation technique. The analytical results revealed that the coefficient of corporate tax on profit after tax was positive with the value of 2.418830 and its P-values were 0.0000, the coefficient of value-added tax was 14.51298 and its p-value was 0.0000. Equally, the coefficient of withholding tax was positive with the value of 7.256489 with p-value 0.0000. Furthermore, education tax result depicts that the coefficient is 36.28245 and it p-value is 0.0000. However, the study concluded that corporate tax rate and education tax as the major taxes paid by companies have positive and significant effects to influence profit after tax. It is also clinched that value-added tax rate and withholding tax being used as other variables that could have effects on profit after tax equally revealed positive and significant effects on profit after tax. Therefore, the study recommended that the government and relevant tax authorities should improve in the administration of corporate taxes to avoid non-compliance

Suggested Citation

  • Olaoye Clement Olatunji & Alade Elizabeth Oluwatoyin, 2019. "Effect of Corporate Taxation on the Profitability of Firms in NIGERIA," Journal of Economics and Behavioral Studies, AMH International, vol. 11(1), pages 191-201.
    • Handle: RePEc:rnd:arjebs:v:11:y:2019:i:1:p:191-201
    DOI: 10.22610/jebs.v11i1(J).2759
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    References listed on IDEAS

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    1. Raza, Syed Ali & Ali, Syed Adeel & Abassi, Zia, 2011. "Effect of corporate income tax and firms’ size on investment: evidence by Karachi stock exchange," MPRA Paper 36800, University Library of Munich, Germany.
    2. Dischinger, Matthias & Riedel, Nadine, 2011. "Corporate taxes and the location of intangible assets within multinational firms," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 691-707, August.
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    Cited by:

    1. Egwakhe A. J & Falana R. B & Asikhia O. O & Magaji N, 2020. "Business Strategies and Competitive Advantage: Evidence from Flour Mill Companies in Lagos State, Nigeria," Journal of Economics and Behavioral Studies, AMH International, vol. 12(2), pages 17-26.
    2. Jackline Nkatha Gitonga, 2023. "Relationship between Income Tax and Profitability of the Hotel Sector in Kenya," African Journal of Commercial Studies, African Journal of Commercial Studies, vol. 3(2).
    3. Lyazzat Yespergenova & Aliya Dosmanbetova & Yengilik Baisheva & Dinmukhamed Zhakipbekov & Myrzabike Zhumabayeva & Alimshan Faizulayev, 2023. "The Factors that Drives the Cost Management Efficiency of Oil and Gas companies in Emerging Markets: The Case of Eurasian Economic Union," International Journal of Energy Economics and Policy, Econjournals, vol. 13(1), pages 328-334, January.
    4. Adebayo Omolola Christiana & Olatunji Opefolu Francis, 2025. "Corporate Tax and Financial Performance: A Case of Listed Consumer Goods Firms in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(5), pages 1928-1936, May.

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