Impact of Board Characteristics on Tax Compliance of Non Financial Listed Firms in Nigeria
[Thesis]
Ogundeji, Mathias Gboyega
Sanni, Mubaraq
Kwara State University (Nigeria)
2020
210 p.
Ph.D.
Kwara State University (Nigeria)
2020
Despite the various codes of corporate governance issued by the governments both in thedeveloped and less developed economies of the world to address the issues of corporate taxscandals, empirical evidences have shown that tax non-compliance is still a universal phenomenonexisting in both developing and developed countries. This lingering challenge constitutes aconstraint on the ability of the government particularly of Nigeria to generate tax revenue toexecute her political, social and economic programmes, amidst dwindling oil revenue. This studytherefore sought to provide empirical evidence on the impact of board characteristics particularlyboard independency,, gender diversity, ownership concentration, multiple directorship and boardlevel financial expertise on tax compliance of non-financial listed firms in Nigeria. Three proxiesof tax compliance, effective interest rate (ETR), cash effective tax rate (CETR) and permanent taxdifference (PEERMDIFF) were used as a measure of tax compliance in order to enhance therobustness of this study. This study employed explanatory sequential design of mixed method tocollect and analyse quantitative and qualitative data and merged the data-sets for interpretationof the results. Generalised Least Squares Regression and Discourse analysis were used forquantitative and qualitative data, respectively. The combined GLS results (Wald Chi squares)showed that Independent directors (ꞵ=0.0000; P<0.05), Gender diversity (ꞵ=0.0140; P<0.05),ownership concentration (ꞵ=0.0166; P<0.05) and board level financial expertise (ꞵ=0.0000;P<0.05) have a statistical significant impact on tax compliance. The study found an insignificantassociation between multiple directorship and tax compliance (ꞵ=0.8811; P<0.05). The qualitativeresults supported the quantitative result except for ownership concentration with a slightmodification. The study concluded that it is necessary to have adequate representation ofexperienced, financial literate and integrity minded independent directors, women and board levelfinancial expertise on the board to achieve tax compliance. In the same vein, more institutionalshareholding is necessary to achieve tax compliance. It also concludes that there is need tostreamline the number of boards per a director at a point in time. The study thereforerecommended that; policies should be formulated and implemented to haveat least 50% of theboard as independent directors,30% of the board as women, 20% of the board as independentfinancial expert, under the proviso that the directors must meet integrity and financial and taxationknowledge criteria. More institutional shareholding should be promoted to achieve taxcompliance. Multiple directorships should be regulated by Financial Reporting Council of Nigeria(FRCN) and Security and Exchange Commission (SEC) to ensure that a director should not be onmore than three (3) boards at the same time