Firm attributes and tax aggressiveness in Nigeria: A quantile regression analysis

Ishaq Alhaji Samaila a and Akeem Adetunji Siyanbola b
a. Department of Accounting, Bayero University Kano, Nigeria;
b. 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 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. However, 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.

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