Impact of Corporate Governance Mechanisam on Corporate Tax Aggresiveness: A Survey of Selected Manufacturing Companies in Nigeria
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Date
2016
Journal Title
Journal ISSN
Volume Title
Publisher
Advances in Management
Abstract
This paper considers the impact of corporate governance mechanisms such as board size, independent director, gender diversity, quality of external auditors, managerial compensation and managerial ownership on corporate tax aggressiveness, among sampled quoted manufacturing companies in Nigeria. 24 out of the 32 fisted manufacturing companies on the Nigeria Stock Exchange as at March, 2016 were used for the study. Secondary data of the sampled companies for an investigation period spanning five years from 2010 to 2014 were used in the study. Our study employs on ordinary least square regression analysis to test the impact of afore listed corporate governance mechanisms on corporate tax aggressiveness. We find that the presence of female directors on corporate board reduces the likelihood of corporate tax aggressiveness, while, tax aggressiveness increases with the quality of external auditor, high managerial ownership of shares and high managerial compensation particularly tied to performance measurement. However, results for board size and proportion of outside directors ore not significant for the purpose of the current study. We recommend that, the appointment of more female directors on corporate board should be encouraged; domination of the big four audit firms in providing assurance and non-assurance audit services should be diluted by engagement of other highly structured partnership audit firms; managerial ownership of shares should be minimized and managerial compensation tied to performance should also be regulated. These are necessary to reduce tax aggressiveness in corporate organisation