International Journal of Innovative Research and Development

Abstract

This study perceived company income tax as the economic responsibility of the firms to the government rather than seeing it as a cost that reduces the profitability and performance of firms. Majority of studies had focused on relationship between taxation and economic growth while there is depth of studies in regards to firm’s performance. Hence, this study examined the effect of company income tax on firm’s performance especially the consumer goods firms in Nigeria spanning 2010 to 2018. Performance was proxied by return on asset (ROA) while company income tax (CIT), valued added tax (VAT) and tertiary education tax (TET) were the explanatory variables. Cross sectional data were sourced in respect of these proxies from three (3) manufacturing firms who are specialized in consumer goods production while estimation was done using Random panel regression. The study found that company income tax and valued added tax have positive and significant effect on return on asset while tertiary education tax has insignificant negative effect on return on asset. Hence, the study concluded that company income tax significantly and positively impacted on firm performance of consumer goods firms in Nigeria.  It is therefore recommended that , prompt payment of taxes by firms should be encouraged after adopting necessary incentives that might have been given by government,  as this would increase the revenue of government and as well enable government to provide necessary infrastructure that would enhance the operations of the consumer goods firms in Nigeria.

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