TAX AGGRESSIVENESS AND TIMELINESS OF FINANCIAL STATEMENTS IN BANKING SECTOR

ABSTRACT

This study empirically investigates the effect of tax aggressiveness on timeliness of financial reporting in Nigeria, using data for twenty (20) deposit money banks in Nigeria for the period 2015-2021. The dichotomous procedure of 1 and 0 (Dummy variable) - the measure for financial report timeliness was regressed on four explanatory variables: tax avoidance, taxable income, book tax difference and effective tax rate.

Employing panel data econometric techniques, the empirical findings showed that: tax avoidance is significantly related to timeliness of financial reporting; taxable income has no significant effect on timeliness of financial reporting; book-tax difference was found to have a significant effect on timeliness of financial reporting; and book effective tax rate has no significant effect timeliness of financial reporting.

In view of the foregoing empirical findings, it is recommended that: banks should ensure that they commence their tax aggressiveness practices earlier before year-end when they are expected to publish their financial statements timely; and for efficiency, banks should place emphasis on activities related to the tax avoidance and book tax difference variables as they were found to be positively and significantly related with the timeliness of financial reporting.