EFFECT OF CORPORATE GOVERNANCE ON TAX PLANNING OF LISTED NON-FINANCIAL FIRMS IN NIGERIA

Abstract

This study investigates the effect of corporate governance on tax planning among listed non-financial firms in Nigeria. Using a balanced panel dataset of 56 firms over the period 2012–2021, the study employs panel regression analysis, estimated using Fixed Effects (FE) and Random Effects (RE) models, with the Hausman specification test used to select the appropriate estimator. Tax planning is measured using the Effective Tax Rate (ETR) and Cash Effective Tax Rate (CETR), while corporate governance is proxied by board size, board independence, and board gender diversity. The results show that board size has a positive and statistically significant effect on both ETR and CETR, indicating stronger tax compliance as board size increases. In contrast, board independence and board gender diversity exhibit weak and statistically insignificant effects across both models. The findings suggest that board structure, particularly board size, plays a critical role in shaping corporate tax behaviour in Nigeria. The study recommends strengthening corporate governance enforcement mechanisms and aligning governance reforms with Nigeria’s tax compliance and non-oil revenue mobilisation objectives.

Keywords: board size, board independence, board gender diversity, effective tax rate, cash effective tax rate