EFFECT OF CORPORATE TAX MIX ON SUSTAINABLE PERFORMANCE OF LISTED MANUFACTURING FIRMS IN NIGERIA

EFFECT OF CORPORATE
TAX MIX ON SUSTAINABLE
PERFORMANCE OF LISTED
MANUFACTURING FIRMS IN
NIGERIA
Ibiam, Otti & Iormbagah, Jacob A* .
Department of Accounting, College of
Management sciences,
Michael Okpara University of Agriculture
Umudike. Umuahia, Abia State.
*jiormbagah1@gmail.com
ABSTRACT
The issue of corporate tax is beyond just
corporate tax payment as many scholars and
practitioners think; it involves effective tax
planning which includes deferred tax and tax
incentives enjoyed by firms in the wake of
unexpected harsh economic crises, of which
the novel Convid_19 pandemic is not
exempted. Making the right tax plan has been
a ranging issue for corporate tax managers
especially for those in the manufacturing
industries with great demand for effective
corporate tax mix that will aid business
sustainable performance. Thus, this study
examines the effect of corporate tax mix on
sustainable
performance
of
listed
manufacturing firms in Nigeria. Data was
collected from 10 listed manufacturing firms
across sectors listed on the Nigerian stock
exchange from 2014 to 2018. The study
adopts ex post facto research design and the
use of multiple linear regression in analyzing
the data. Findings revealed that tax incentive
has a positive insignificant effect on the net
income of listed manufacturing firms in Nigeria
Accounting and Finance Research Association
while, deferred tax has a negative insignificant
effect on the net income of listed firms in
Nigeria. Further findings revealed that
company income tax has a positive and
significant effect on net income of listed
manufacturing firms in Nigeria. The study
implication is that, the tax incentives available
for manufacturing firms is not enough to boast
manufacturing activities for sustainable
performance of the firms, and this compels
the firms to defer their tax payment which
ends up becoming deferred tax liabilities. In
line with the study findings, it is recommended
that; in the wake of economic crises,
government should provide more tax
incentives that will encourage both tax
deferment and increased manufacturing
activities in Nigeria to enhance sustainable
performance by the firms. Also, manufacturing
firms should consider the need to explore the
various tax incentives available as a way to
determine an
effective corporate tax mix, such that
continues company income tax payment will
be sustained; this will reduce the tax burden
of the firm and discourage future deferred tax
liabilities accruable to the firm. Also,
manufacturing firms should consider highly
the need to engage the services of tax experts
that will help the firms in making tax plans;
knowing when to use deferred tax approach
as a way of shielding against the
consequences of immediate corporate tax
payment against the net income of the
manufacturing firms during economic crises;
this will enable the manufacturing firms have
enough residual net income for sustainable
performance and investment. Keywords: Tax
incentives, deferred tax, company income tax
and net income

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