Effects of Tax Planning Strategies on the Financial Performance of Selected Nigerian Listed Manufacturing Firms

The need to improve the financial performance of manufacturing firms in Nigeria by reducing tax liabilities through various financial strategies is incumbent. This study examined the effect of tax planning strategies and financial performance of listed manufacturing firms in Nigeria. Expost facto research design was used. The population of the study comprised of 63 manufacturing firms in Nigeria listed on the Nigerian Exchange Group as at 31st December, 2022. The sample size of 30 firms was selected using purposive sampling method. Data were obtained from the audited financial reports of the firms from the period of 2012-2022. Data were analysed using panel regression analysis. Results showed that thin capitalization has insignificantly positive effect on financial performance of listed manufacturing firms in Nigeria, tax rate used as proxy for tax haven has significant positive effect on financial performance, also, research and development tax have negative insignificant effect on financial performance. Therefore, the study concluded that effective tax planning strategies enhances financial performance, especially by optimizing the tax rates. The study recommended that manufacturing firms in Nigeria should undertake a comprehensive analysis of their tax rates in order to identify optimization opportunities and also invest more on research and development so as to leverage potential tax benefits.