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The notion that tax planning activities are schemes to deprive the government of revenue continued to garner the concerns of other business stakeholders.Based on stakeholders and tax planning theoretical foundations, this study examined the effect of tax sheltering on the corporate investment expenditure of listed financial firms in Nigeria.The indicators of tax sheltering modelled in the study are effective tax rate, book tax difference, and tax savings while total investment expenditure was the dependent variable.The study selected 20 listed financial firms and generated data from the audited annual reports and accounts from 2012 to 2022.The three hypotheses were tested using the Multiple Correlated Panels Corrected Standard Errors (PCSEs) Model.The results revealed that the effective tax rate (ETR), exerted a statistically negative significant effect on the total investment expenditure; book-tax difference (BTD) exhibited a statistically non-significant effect on total investment expenditure while tax savings stimulated total investment expenditure.The overall result revealed a statistically significant explanatory power of the regressors on total investment expenditure which implies that tax sheltering could foster business growth opportunities and expansion when funds saved are invested in capital expenditure, particularly the non-current assets.
Eze et al. (Sat,) studied this question.