Title: IMPACT OF TAX PLANNING ON PROFITABILITY OF LISTED SERVICE FIRMS IN NIGERIA

Authors: Oluwadamilola Esther Olatunde, Moses Babatunde Olanisebe and Rashida Lawal

Abstract: The study assessed the impact of tax planning on profitability of listed service firms in Nigeria. The study adopted correlational research design and utilized secondary data extracted from the published annual reports and audited financial statements of selected service firms listed on the Nigerian Exchange Group (NGX). The population comprised twenty (20) listed service firms on the Nigerian Exchange Group (NGX) as at 31st December, 2025. A sample size of fifteen (15) listed service firms was selected, and secondary data were obtained from annual reports covering a period of sixteen (16) years (2010 to 2025). Descriptive, correlation, and regression analyses were conducted. The findings revealed that tax planning (effective tax rate, book-tax-difference and tax saving) do not have a significant impact on the profitability of listed service firms in Nigeria while cash effective tax rate and Henry and Sansing’s measure have negative and significant impact on profitability of the sampled service firms. Specifically, the study conclude that cash effective tax rate and Henry and Sansing’s measure contribute significantly to improving firm profitability while effective tax rate, book-tax-difference and tax saving alone may not guarantee improved profitability level. Accordingly, the study recommended that the management of listed service firms in Nigeria should make use of sustained tax incentive policies which are essential for enhancing profitability and firm growth.

Keywords: Tax planning, profitability, listed service firms in Nigeria.

PDF Download