External Determinants of Tax Aggressiveness of Listed Non-Financial Companies in Nigeria

Abstract

Research aim: Past studies have shown that managers tend to exhibit opportunistictendencies which do not align with the shareholders’ interest. According to the agencytheory, conflicts arise when a company’s manager (the agent) and stockholders (theprincipal) have different objectives. The firm’s management and the revenue authority haddifferent objectives when it came to using a company’s financial report, which resulted ininformation asymmetry.Design/ Methodology/ Approach: The research adopted a longitudinal design andpurposefully sampled 63 companies out of a total population of 112. Secondary data wasobtained from the selected companies’ annual reports spanning from 2015 to 2024, andanalysed using regression techniques.Research finding: The findings revealed that institutional ownership, foreign ownership,ownership concentration, audit firm size, and leverage significantly influence taxaggressiveness, whereas board financial expertise exerts no significant impact on the taxaggressiveness of Nigerian publicly listed non-financial companies.Theoretical contribution/Originality: This study contributes to the literature by filling agap in sector-specific analyses of external determinants of tax aggressiveness within theNigerian context. Grounded in agency theory, it extends prior research by disaggregatingfindings across industry sectors and demonstrating how external controls shape corporatetax behaviour.Practitioner/Policy implication: The findings suggest that policymakers should enhanceregulatory oversight on institutional and foreign investors’ influence in corporategovernance, promote the engagement of high-quality audit firms, and encourage debtmonitoring mechanisms to reduce aggressive tax behaviour. Companies should alsoconsider increasing the presence of financially literate board members to balance strategictax planning with compliance.Research limitation: The research focuses on publicly listed non-financial companiesin Nigeria and spans the years 2015 to 2024. The exclusion of financial institutions andthe reliance solely on secondary data may affect the generalizability of the results.Future studies could incorporate qualitative methods or expand to include cross-countrycomparisons and unlisted firms