FIRM SPECIFIC CHARACTERISTICS AND CORPORATE TAX PLANNING IN NIGERIA

ABSTRACT

In this study, we evaluate the relationship between some firm specific characters and tax planning of listed commercial banks in Nigeria. The scope of this study covers a 10-year period ranging from 2011 to 2020. The dependent variable of tax planning is in terms of non-debt tax shield. The independent variables of interest which we employed in other to ascertain their possible relationship includes working capital, capital expenditure, dividend payout, leverage, and cash holding. Specifically, we conduct pre regression analysis which includes descriptive statistics, correlation analysis, and normality of residua analysis. Basically, the panel Least Square Regression analysis was first conducted, and diagnostic tests were carried out on the estimates to check if it violates the basic Gauss Markov Theorem and assumptions as recommended by Woodridge, (2002). Post regression tests that were conducted includes test for multicollinearity, test for homoscedasticity as well as test for fixed and random effect error. A critical examination of all the diagnostic test revealed that the model failed the normality assumption. However, we carefully interpret the p-values of the Hierarchical regression analysis based on Hausman specification recommendation for random effects model serving as most appropriate over fixed effect.