Firms’ Characteristics and Aggressive Tax Avoidance Practices among Listed Commercial Banks in Nigeria

Abstract

This project work focused on the aggressive tax avoidance practices and firm characteristics among Nigeria's listed commercial banks with the overarching goal of examining the relationship between business' features and aggressive tax avoidance methods. Regression analysis was employed as a secondary data source for thirteen (13) commercial banks that are listed on the Nigeria Exchange Group and submit their accounts by December 31st of each year. The study, which covered between 2012 and 2023, employed a descriptive statistical and analytical technique to characterize the variables and a descriptive method to analyze the reliability and predictive power of the regression model in determining whether to accept or reject the null hypothesis. Only Leverage (p-value = 0.249228) at 1% has an adverse association with ETR, although the correlations with FSIZE (r = 0.203653), Leverage (r = -0.11244), Profitability (r = 0.211617), and FML (r = 0.237959) are all found to be positively correlated excepting leverage. For FSIZE (0.006797, p=0.086131), the result showed a positive coefficient with a significant P-value. It displays a negative coefficient for leverage with a negligible P-value (-0.00058, p=0.249228). Profitability's P-value is substantial and it has a positive coefficient. (0.029673, p = 0.095781). FML furthermore exhibits a positive coefficient and a significant P-value (0.030843, p = 0.08742). Based on the estimation results, this study finds that the features of the firms have an impact on the aggressive tax evasion of commercial banks listed on the Nigerian Exchange Group. The research suggests that when examining the elements that lead to aggressive taxation, greater attention should be paid to firm size, profitability, leverage, and foreign market listing by different parties, especially those in Nigeria.