TAX PLANNING STRATEGIES AND FINANCIAL PERFORMANCE

Abstract

This research examines the effects of tax planning strategies, such as tax incentives, financial leverage, and real earnings management (REM), on the financial performance of consumer goods manufacturing firms listed on the Nigerian Stock Exchange (NSE) from 2015 to 2024. Employing ex post facto research design and panel data regression, the study analyzes financial performance indicators including return on assets (ROA), return on equity (ROE), earnings per share (EPS), and current ratio, in conjunction with tax planning proxies like effective tax rate (ETR) and cash effective tax rate (CETR). The results indicate that tax planning strategies have a significant and positive impact on financial performance. The study advises corporate managers to focus on strategic tax planning, carefully consider tax-aggressive tactics, and debt financing to enhance financial results, while policymakers should simplify tax incentives to foster sector development.