Original Research Article | OPEN ACCESS
Determinants of Corporate Effective Tax Rate: Empirical Evidence from Listed Manufacturing Companies in Nigeria

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Received: 27 April 2018        Accepted: 30 August 2018        Published: 30 September 2018

Citation: Determinants of Corporate Effective Tax Rate: Empirical Evidence from Listed Manufacturing Companies in Nigeria. Account Tax Rev 2003; 2(3):49-61 doi:

© 2003 The authors.
This is an Open Access article that uses a funding model which does not charge readers or their institutions for access and distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0) and the Budapest Open Access Initiative (http://www.budapestopenaccessinitiative.org/read), which permit unrestricted use, distribution, and reproduction in any medium, provided the original work is properly credited..


The objective of this study is to identify how some corporate governance attributes (board size and board independence), as well as firm characteristics factors such as size and leverage, can determine the Effective Tax Rate (ETR) ofmanufacturing firms in Nigeria. Out of the 170 listed firms in Nigeria, as at 31/12/2016, 30 manufacturing firms with complete and consistent data were selected and the period under consideration was from 2011 – 2016. Linear regression was used to analyse the data. Results reveal that firm leverage, board independence and board size were negatively and significantly related to Effective tax rate while firm size was negatively but insignificantly related to ETR. This implies that the higher the firm leverage, board independence and board size, the lower the effective tax rate paid by manufacturing firms in Nigeria. This study, therefore, recommends that firms in Nigeria should make firms should work towards having a large board size as this will influence good strategies in minimising tax expense and invariably bring about the best tax management practices. Also, external board members with experience in accounting, finance and management issues should be highly encouraged as this will reduce the tax rate and bring about efficient tax practices.

Keywords: Corporate Effective Tax Rate, Board Size, Board Independence, Leverage

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