MODERATED EFFECT OF EFFECTIVE TAX RATE ON TAX INCENTIVES AND FINANCIAL PERFORMANCE OF LISTED CONSUMER GOODS MANUFACTURING COMPANIES IN NIGERIA

Abstract

This study evaluated the effect of tax incentives on financial performance of listed consumer goods manufacturing companies in Nigeria. Specifically, the study determine the effect of investment allowance, annual allowance on return on assets  of listed consumer goods manufacturing companies in Nigeria and finally, determine the moderating effect of effective tax rate on the relationship between tax incentives and return on assets of listed consumer goods manufacturing companies in Nigeria. The study employs an ex-post facto research design. The population of the study was twenty one (21) consumer goods manufacturing companies listed on the floor of the Nigerian Exchange Group (NGX) as from (2015 -to- 2024). The method of data analysis was descriptive statistic, unit root test, diagnostic test and multiple regression of Panel Least Square (PLS) with the help of E-view 10 and SPSS for the purpose of Moderated Multiple Regression. The study result indicated that there is a significant effect of investment allowance on return on assets, there is no significant effect of annual allowance on return on assets of listed consumer goods manufacturing companies in Nigeria, and there is no significant moderating effect of effective tax rate on the relationship between tax incentives and return on assets of listed consumer goods manufacturing companies in Nigeria. Therefore, the study generally concluded that there is no moderated effect of effective tar rate on tax incentives and financial performance of listed consumer goods manufacturing companies in Nigeria for the time frame investigated. The study recommends amongst other that due to the complexity and dynamism of Nigeria's tax laws, manufacturing companies in Nigeria should make investment allowance (tax incentive) planning a part of their strategic financial planning, hire tax experts, and effectively use all-inclusive tax planning strategies available in order to significantly influence return on assets.