Effect of Corporate Tax Liabilities on Financial Performance of Listed Deposit Money Banks in Nigeria

Abstract

This paper examined the effect of corporate tax liabilities and financial performance of listed deposit money banks in Nigeria. The corporate taxes were proxied by company income tax and tertiary education tax while financial performance was proxied by ret urn on assets. An ex -post facto research design was adopted for the study. A purposive sampling technique was used to select the sample using filter criteria. Data were obtained from annual reports and accounts of sampled deposit money banks in Nigeria for a period of ten years (2016-2025). Regression was used to test the hypothesis at a significance level of 5%. The findings showed that company income tax had a positive and insignificant effect on financial performance, while tertiary education tax has a positive and insignificant effect on financial performance of listed deposit money banks in Nigeria. The study concluded that the relationship between corporate tax liabilities and the financial performance of Nigerian deposit money banks is neither uniform ly positive nor uniformly negative. The study recommended that deposit money banks should invest in professional tax advisory capacity to optimize legitimate tax planning without resorting to aggressive avoidance strategies that carry reputational and lega l risk and that managers of banks should be sensitized on the need to pay the tertiary education tax and its collections from the various sources should be strengthened as tertiary education tax provides funds for research in higher institutions of learning which aim at solving existing company’s problem and invention of new product which in turn leading to a higher profitability.