The Impact Analysis of Investment Decisions on Taxations of Corporate Organisations: An Empirical Studies from Nigeria

Abstract

The research work titled “impact analysis of investment decisions on taxations of corporate organisations in Nigeria” was carried out with the primary aims of investigating whether the choice debt over equity has significant impact on taxes in Nigeria. It also surveyed on the influence of capital expenditure of corporate entities on their taxes and whether the working capital management can be used in tax planning of corporations in Nigeria. The original propositions, as well as the principles of Modigliani and Miller's Theorem (1958), indicate that there is a completely efficient market with no taxes, transactions, or bankruptcy costs, and that all participants have access to a wealth of information. Modigliani and Miller included the influence of taxes to their model in 1963, bringing the theory closer to reality (Adegbite and Shittu, 2017). The researcher opted to limit the study to an object (i.e. Federal Capital Territory Abuja) thereby selecting 5 industries selected from the Nigerian Stock Exchange to include Financial services, construction/real estate, oil and gas, consumer goods and information and communication technology (ICT) with a total of five (5) corporate organizations as respondents Selected from the population. In terms of the research issue, the findings were expanded to the entire population. At the conclusion of the study, the researcher determined that the choice of debt over equity, capital expenditure, and working capital over taxes of business organizations in Nigeria had no statistically significant influence. The researcher finally recommended that enough processes should be in place at all times to ensure that all types of taxes in Nigeria are correctly accounted for and filed with the relevant tax authority and that corporate organisations in Nigeria require the services of tax consultants in order to incorporate proper tax planning mechanism in their business dealings.