Corporate Income Tax Burden on Liquidity Of Listed DMBs in Nigeria
DOI:
https://doi.org/10.61143/umyu-jafr.6(1)2024.006Keywords:
Corporate income tax burden, Bank’s age, LiquidityAbstract
This study assesses the effect of corporate income tax burden on liquidity of listed deposit money banks in Nigeria from 2018 to 2022. The entire fourteen listed deposit money banks served as population of the study. Data ware obtained from annual reports and accounts of the banks. Correlation analysis and panel analysis were used within this framework. Panel multiple regression analysis is used to manipulate the dependent variable that is, liquidity measured by cash ratio, independent variable corporate income tax burden measured by marginal tax rate and tax expense and control variable used was bank’s age. The result reveals that, marginal tax rate has significant positive effect on liquidity and tax expense has negative significant effect on liquidity. On the control variable bank’s age indicates a positive significant effect on liquidity among listed deposit money banks in Nigeria. The study recommends among others that, Nigerian banks should focus on tax planning strategies, such as utilizing tax incentives and credits, structuring tax efficient transactions and managing tax risks effectively. By doing so, the firms can potentially enhance their financial performance and increase their liquidity position and could encourage banking sector’s growth and development.
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