Tax planning and financial performance of conglomerate firms in Nigeria

This study explores the influence of tax planning on the financial performance of conglomerate firms in Nigeria between 2014 and 2023. The study focuses on the roles of effective tax rate (ETR), tunneling incentive (TI), and bonus mechanism (BM). A fixed effects panel regression model was employed, validated through the Hausman test (p = 0.0036). Findings indicate that ETR and log of gross profit (LOGGP) significantly and positively affect firm performance, showing that profitable firms often bear higher tax burdens but also display stronger operational efficiency. Conversely, TI and BM recorded negative and positive coefficients, respectively, though both were statistically insignificant. The model explained 46.57% of the variation in performance, and all diagnostic checks confirmed its robustness. These findings highlight the importance of taxmanagement, corporate governance, and incentive systems in shaping the financial outcomes of conglomerates in Nigeria.