What question did this study set out to answer?

This research aims to explore how corporate governance practices influence tax aggressiveness in Nigerian industrial goods firms.

May 2, 2026Open Access

Corporate Governance Mechanisms on Tax Aggressiveness of Quoted Industrial Goods Firms in Nigeria

Key Points

This research aims to explore how corporate governance practices influence tax aggressiveness in Nigerian industrial goods firms.
Sample included 11 out of 13 quoted industrial goods firms on the Nigerian Exchange Group as of December 31, 2024.
Utilized an ex-post facto research design with data from annual reports.
Hypotheses were examined using a random effect regression model after diagnostic tests.
Board size, independence, and financial expertise slightly positively affect the effective tax rate.
Board gender diversity significantly improves the effective tax rate.
Recommendations include enhancing tax reporting transparency to boost investor confidence.

Abstract

In order to ensure responsibility, transparency, and moral behavior in corporate organizations, corporate governance has become essential. This is especially true when it comes to reducing opportunistic behaviors like tax aggression. The effectiveness of governance systems in preventing aggressive tax techniques has drawn increasing attention from academics and regulators in Nigeria's industrial products sector, where businesses are crucial to the country's development. The impact of corporate governance practices on the tax aggressiveness of Nigerian listed industrial goods companies was investigated in this study. Eleven (11) industrial goods firms were used as the sample size using filtering criteria, and the population consisted of all thirteen (13) industrial goods firms quoted on the Nigerian exchange group (NGX group) as of December 31, 2024. The study used an ex-post facto research design.The information utilized came from the 11 industrial goods companies listed on the Nigerian Exchange Group's annual reports. Following a few diagnostic tests, the hypotheses were examined using a random effect regression model. The results showed that the effective tax rate of listed industrial products companies in Nigeria is slightly positively impacted by board size, independence, and financial expertise. Nonetheless, the effective tax rate of quoted industrial products companies in Nigeria is significantly improved by board gender diversity. According to the survey, companies should increase the transparency of their tax reporting in order to boost investor confidence and responsibility. The study also suggested that shareholders and regulators make sure that a greater percentage of independent directors are on the boards of industrial products companies. Independent directors are more likely to perform impartial monitoring and discourage aggressive tax techniques that could put companies at risk financially and in terms of their reputation.

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