Corporate Tax Planning, Governance and Firms’ Value of Non-Financial Listed Firms; Pre and Post IFRS Adoption in Nigeria.
DOI:
https://doi.org/10.59890/ijatss.v2i12.36Keywords:
Tax Panning, Corporate Governance, Firm Value, Tax AggressivenessAbstract
The topic of firms’ value has attracted the attention of academics in the modern world due to its importance for decision-making for investors and other stakeholders. This study examined the effects of corporate tax planning and corporate governance on firms’ value of non-financial listed firms; pre and post IFRS adoption in Nigeria. The specific objectives were to assess the effect of effective tax rate on firm’s value, it also considers whether board independence moderates the effective tax rate, before and after the implementation of International Financial Reporting Standards in Nigeria. The study was anchored on Hoffman’s theory of tax planning. The study analyzed all non-financial enterprises listed on the Nigeria Exchange Group. The study uses seventy-three (73) enterprises during a 20-year span, 10 years before IFRS adoption (2003–2012) and ten years after IFRS adoption (2013–2022).The study used secondary data sourced from Audited financial report of the sampled firms. The study used Fixed Effect Model for both pre and post IFRS adoption using ordinary least square method. The results of the fixed effect estimation show that Tobin Q has (t-stat 8.789618; ρ 0.000; t-stat 1.24357; ρ 0.014; t-stat -2.43656; ρ 0.0415). The result revealed that effective tax rate (ETR) had a positive and significant impact on the value of the company both before and after IFRS adoption in Nigeria. Board independent (BI) had positive substantial moderating impacts on the effective tax rate both before and after the introduction of IFRS, according to the results for the moderating variables. (t-stat -8.00986, ρ 0.000,). The control variables result showed that firm leverage (LEV) have positive significant effect on firm value pre and post IFRS adoption while return on equity (ROE) showed a positive significant duding pre adoption but insignificant effect after adoption. The study concluded that effective tax rate (ETR). The results revealed that firms engage more in tax planning actions after the IFRS adoption. This study consequently concluded that the Nigerian government adopts measures that would most likely revolve around evaluating board composition, reforming corporate governance practices, enhancing tax compliance guidelines, and providing training to board members to address the challenges related to board independence and corporate tax planning post-IFRS adoption
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