EFFECT OF SELECTED BOARD ATTRIBUTES ON TAX AGGRESSIVENESS OF QUOTED MANUFACTURING COMPANIES IN NIGERIA

Abstract

This study examines the effect of selected board attributes on the tax aggressiveness of quoted manufacturing companies in Nigeria. The study examines the combined effect of female directors and board financial expertise on the tax aggressiveness of quoted manufacturing companies in Nigeria. Tax aggressiveness was measured using effective tax rate while female directors and financial experts were measured using the proportion of female directors on the board to the total board size and the number of directors with financial expertise to the total board size on the board respectively. This study uses a longitudinal research design. The population of the study is the entire listed manufacturing companies in the Nigerian stock exchange. A sample size of twenty-two was selected. Data were sourced from the annual financial statements of the companies for the period (2011-2020). The data were analyzed using multiple regression analysis techniques. The result of the study shows that female directors have a negative and insignificant effect on tax aggressiveness. However, the study finds statistical evidence which suggests that boards' financial expertise has a significant effect on tax aggressiveness in the manufacturing sector. From the findings, it was concluded that board attributes have strong explanatory power on tax aggressiveness. The study recommends that since management could aspire to avoid more taxes because they estimate the tax benefits too high, more external board members with accounting and corporate reporting knowledge should be admitted to the boards to curtail managerial aggressive tax planning.