Tax Aggressiveness and Sustainability of Listed Oil and Gas Firms in Nigeria: Does Firm Size Matter?

Abstract

This study empirically investigated the relationship which exists between tax aggressiveness moderated by firm size and sustainability of oil and gas firms in Nigeria. In order to determine the relationship between tax aggressiveness and corporate sustainability, tax aggressiveness was measured using effective tax rate while corporate sustainability on the other hand was proxy using social-environmental performance. The formulated hypotheses to guide the investigation and the statistical test of parameter estimates was conducted using OLS regression model operated with STATA V.15. Ex Post Facto design was adopted and data for the study were obtained from the published annual reports and accounts of listed oil & gas firms on Nigerian Exchange Group (NGX) spanning from 2013-2021. The findings of the study generally indicate that tax aggressiveness has significant and positive relationship with sustainability of quoted firms in Nigeria at 1% significant level. In the same vein, it was noted that firm size moderates the relationship between tax aggressiveness and corporate sustainability at 5% level of significance. Thus, the study concludes that tax aggressiveness ensures sustainability of firms in Nigeria. The study however suggests the need for corporate organizations to engage the services of tax consultants to assist them to organize the firm’s financial dealings in such a way t hat t he firm suffers a minimum tax liability.

Determinants of Tax Aggressiveness in Mining Companies Listed on the IDX

“…Tax aggressiveness referred to the strategic efforts undertaken to reduce the tax liability through the implementation of tax planning measures, which involve the manipulation of taxable income, encompassing both lawful practices (tax avoidance) and unlawful practices (tax evasion) (Frank, Lynch, & Rego, 2009;França & Bezerra, 2022;Sumiati, 2021) tax aggressiveness refers to the proactive tax strategies implemented by management with the aim of optimizing the company's profitability while minimizing its tax liabilities (Emeka & Ngozi, 2022;Abanum & Ebiaghan, 2022;Valdir et al, 2022). Ojala et al, (2023) find that tax aggressiveness increases the likelihood of additional taxes in the long run.…”

Responsibility Accounting and Corporate Sustainability Growth: Evidence from Listed Deposit Money Banks in Nigeria

“…It could also be defined as a strategy in which a company provides its services and goods to enable economic and sustainable growth. Furthermore, it effectively prioritizes long-term development through environmentally friendly methods over short-term financial gains (Omaliko and Okpala, 2022). According to Kanyarat (2023), corporate sustainability growth is an affordable growth that could be profitably maintained by corporate organizations for future benefit.…”