Firm Attributes and Tax Aggressiveness in Nigeria: A Quantile Regression Analysis


Firm Attributes and Tax Aggressiveness in Nigeria: A Quantile Regression Analysis

Ishaq Alhaji Samaila Department of Accounting, Bayero

University Kano, Nigeria

Akeem Adetunji Siyanbola Department of Accounting, Federal

University Wukari, Nigeria

Studies on impact of firm attributes on tax aggressiveness have examined the relationship based on the conditional mean of tax aggressiveness. However, it is imperative to look at the interaction from conditional quantiles of tax aggressiveness because it portrays the extent of influence of firm attributes on entire distribution of tax aggressiveness. Thus, this study compares the influence of firm attributes on tax aggressiveness using estimated values from Ordinary Least Squares and quantile regressions. The study samples 29 largest firms in the NSE between 2007 and 2018. Data for the study was sourced from the annual reports of sampled companies and the daily official list of the Nigerian Stock Exchange (NSE). Consistent with the mixed results reported in prior studies, the study finds limited relation between various component of firm attributes and tax aggressiveness at the conditional mean of its distribution. Using quantile regression, there is a negative relation between total debt ratio and tax aggressiveness for low levels of tax aggressiveness, but no relation for high levels of tax aggressiveness. These results indicate that total debt ratio has stronger influence on extreme low level of tax aggressiveness. The study thus recommends that directors should pay attention to specific impact of each of the firm attributes on tax aggressiveness with a view to match them with appropriate level of tax aggressiveness that generates optimum tax savings. This will assist Nigeria to speedily recover from economic depression consequent upon the lockdown.

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