Taxation and Performance of Manufacturing Companies in Nigeria: Evidence from Flour Mills Plc

Abstract

The study examined the impact of taxation on the performance of manufacturing company in Nigeria from 2005-2021. The study sought to determine if taxation has any impact on the return on asset (ROA) and earnings per share (EPS) using flour mills plc as a case study. The Ex-post research design was adopted and time series data were collected for the study. The ordinary least square regression analysis was used in the analysis. The findings revealed that there is no significant relationship between taxation and the performance of manufacturing company in Nigeria. From the result of the analysis, independent variable of tax showed a weak and negative relationship with ROA and weak and positive relationship with EPS. The study recommends that there should be improvement in the effectiveness of tax administration by ensuring proper assessment. Also, all Relevant Tax Authorities (ROA) should endeavour to have good relationship with the Professional Associations like Chartered Institute of Taxation of Nigeria (CITN) and Institute of Chartered Accountants of Nigeria (ICAN) involved in tax matters so as to increase their support in reducing tax malpractices perpetrated by tax payers with the connivance and often active support of external auditors and tax consultants. Also, the entire tax system as well as the taxes that affect the performance of manufacturing sectors should urgently be overhauled for more effectiveness to achieve the desired results.