Corporate Taxes and Financial Performance of Listed Information and Communication Technology Companies in Nigeria

Abstract

This paper examined the effect of corporate taxes and financial performance of listed information and communication technology companies (ICT) in Nigeria. The corporate taxes were proxied by company income tax and education tax while financial performance was proxied by profit after tax. Content analyses of the annual report of sampled companies were carried out using descriptive and inferential statistics. An ex-post facto research design was adopted for the study. A simple random sampling technique was used to select the sample. Data were obtained from annual reports and accounts of sampled ICT firms in Nigeria for a period of five years (2018-2022). Regression was used to test the hypothesis at a significance level of 5%. The findings showed that corporate taxation positively and significantly affected the financial performance of information and communication technology companies in Nigeria (p-value =0.0000; <0.05). The findings also showed that company income tax was positively and significantly related to financial performance in quoted information and communication technology companies in Nigeria. However, education tax has significant negative effect on financial performance of information and technology companies in Nigeria. The Adjusted R Square of 0.9974 showed that 0.3% is outside financial performance matrix and was recommended that the government should encourage voluntary payment of taxes with the introduction of reduced tax rates, public awareness, reduction of ambiguity in the tax law and provision of adequate infrastructural facilities which tax payer’s fund were used to provide for the society to encourage taxpayers’ compliance culture.