Journal • CITN Journal

Editorial Board

Editor-in-Chief

Professor Rafiu Oyesola Salawu

Department of Management & Accounting, Faculty of Administration, Obafemi Awolowo University, Ile-Ife

Managing Editor

Professor Godwin Emmanuel Oyedokun

Department of Management & Accounting, Lead City University, Ibadan, Nigeria

Editorial Board Secretary

Mary-Fidelis Chidoziem Abiahu

Director, Research and Professional Standard, Chartered Institute of Taxation of Nigeria

Editorial Board Members

Professor Chinedum Nathaniel Nwezeaku

Federal University of Technology, Owerri

Professor John Adeoti

Nigeria Institute of Social and Economic Research (NISER), Ibadan

Professor Uche Jack-Osimiri

Faculty of Law, River State University, Port Harcourt

Professor Aruwa Suleiman Akwu-Odo Salihu

Nasarawa State University, Keffi Nasarawa State Nigeria

Dr. Eiya Ofiafoh Ofiafoh (Associate Professor)

Department of Accounting, University of Benin, Benin City, Nigeria

Dr. Stephen Chukwuemeka Mark Abani

MCSA Worldwide Projects Limited, Abuja, Nigeria

Dr. Kenny Adedapo Soyemi

Department of Accounting, Olabisi Onabanjo University, Ago Iwoye, Ogun State, Nigeria

Professor Joseph Uchenna Uwaleke

Department of Banking & Finance, Nasarawa State University, Keffi Nasarawa State, Nigeria

Barrister Chukwuemeka Eze

Faculty of Law, Nasarawa State University, Keffi Nasarawa State, Nigeria

Mr. Simon Nwanmaghyi Kato

Federal Inland Revenue Service, Chairman’s Office, Abuja, Nigeria

PROFIT SQUEEZE FROM TAX BURDENS: EVIDENCE FROM LISTED CONSUMER GOODS FIRMS IN NIGERIA

Description

PROFIT SQUEEZE FROM TAX BURDENS: EVIDENCE FROM LISTED CONSUMER GOODS FIRMS IN NIGERIA

Authors

NWORIE, Gilbert Ogechukwu, ELOM, Joseph Ogwu, NWAMBEKE, Godfrey Chinedu and NWUZOR, Roseline Ngozi

Abstract

Despite the critical role consumer goods firms play in Nigeria's economy, many struggle to maintain profitability under increasing tax burdens. Excessive or poorly structured taxation may erode earnings, discourage reinvestment, and weaken long-term financial performance. Hence, this study investigated the profit squeeze resulting from tax burdens among listed consumer goods firms in Nigeria. Tax burden was measured using effective tax rate while return on investment was used in measuring firm profitability. Employing an ex post facto research design, the study examined a purposively selected sample of 12 out of 20 listed consumer goods firms over an 11-year period (2014–2024). Secondary data were sourced from published annual reports. In addition to the descriptive analysis carried out, tests of cross-sectional dependence and panel heteroskedasticity were conducted to assess the validity of the panel regression model. Hypothesis was tested using estimates from panel estimated generalized least squares (EGLS). The findings revealed that an increase in the effective tax rate significantly reduces firm profitability, with a negative effect on return on assets (coefficient = -0.001585, p-value = 0.000). The study concluded that rising tax burdens have a constraining effect on financial performance. The study therefore recommended that tax authorities and policymakers consider more growth-friendly tax regimes to enhance firm profitability and sectoral sustainability.

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