EFFECT OF CORPORATE INCOME TAX RATE ON INVESTMENT DECISIONS OF LISTED
DEPOSIT MONEY BANKS IN NIGERIA

Yunusa Salisu Muhammad and Hannatu Sabo Ahmad PhD 7

Absract
The study examined the effect of corporate income tax rate on investment decisions of listed deposit money banks in Nigeria. Descriptive research design was used in this study. The population of the study was made up of twenty two listed deposit money banks in Nigeria. Panel data were generated from secondary source through annual reports and accounts of the sampled banks covering the periods of 2014 to 2018. Ordinary Least Square (OLS) regression was used in analyzing the data of the study. The study employed a simple random sampling technique in selecting the sample size of the study. The findings of the study indicated that after tax cash flow is the major factor that affect investment decisions of listed deposit money banks in Nigeria. Whereas depreciation tax shield and interest tax shield had insignificant effect on investment decisions of listed deposit money banks in Nigeria and corporate tax rate has no effect on investment decisions of listed deposit money banks in Nigeria as the company income tax rate of 30% has been constant over decades. The study recommended that shareholders as well as management of Nigerian banks should device means of increasing their turnover which will in turn boost their profitability/ after tax cash flow and the resultant effect will improve investment in long term assets.
Keywords: corporate tax rate, Investment decision, depreciation tax shield, interest tax shield.

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