Managerial Incentives and Ownership Stake as Determinants of Tax Aggressiveness Among Nigerian Firms

This study examines the influence of managerial incentives and ownership stake on the corporate tax aggressiveness of firms listed on the Nigerian Exchange Group (NGX). The study explicitly assesses the effect of the executive compensation and ownership stake (independent variables), firm size, and leverage (control variables) on corporate tax aggressiveness, proxied by effective tax rate (ETR). Employing a quantitative research design, this study utilises panel data regression analysis on a sample of 30 listed Nigerian firms over the period 2018-2022. The results indicate that both executive compensation and ownership stake significantly influence corporate tax aggressiveness. Specifically, firms led by executives with higher compensation packages and ownership stakes exhibit greater tax aggressiveness in reducing tax liabilities. Furthermore, firm-specific characteristics such as size and leverage are also found to play a significant role in shaping tax outcomes. This study offers empirical evidence from Nigeria that managerial incentives and ownership stake significantly influence corporate tax aggressiveness. The results reinforce agency theory by demonstrating how executive traits like ownership and compensation shape aggressive tax planning. The study further provides practical guidance for policymakers, regulators, and boards in promoting effective governance and enhancing tax compliance.