Moderating Effect Of Tax Expertise On The Relationship Between Corporate Tax Planning Strategies And Profitability Of Listed Consumer Goods Companies In Nigeria

Abstract

This study examined moderating effect of tax expertise on the relationship between corporate tax planning strategies and the profitability of Nigerian consumer goods companies. The study employed ex-post facto research design. The study focused on 15 sampled companies from a population of 21, covering a 16-year period (2007–2022). Data was collected from the sampled companies and analysed using panel corrected standard error regression technique. The findings reveal that effective tax rate and tin capitalization both have a negative and significant impact on return on capital employed. Capital intensity positively and significantly affects return on capital employed. Tax expertise positively and significantly affects return on capital employed. Tax expertise also significantly moderates the relationships between effective tax rate, thin capitalization, capital intensity, and profitability, amplifying the positive impacts of tax planning strategies. However, its moderating effect on the relationship between firm size and profitability is positive but insignificant. Based on these findings, the study recommends that companies focus on strategies to minimize effective tax rate, optimize debt levels, and invest in capital assets while leveraging the expertise of tax professionals on their boards to enhance profitability. Further research should explore the long-term impacts of these strategies, consider other sectors of the Nigerian economy, and examine additional corporate governance factors.