Corporate Social Responsibility and Tax Avoidance in Nigeria

Abstract

This study focused on the impact of corporate social responsibility (CSR) on tax avoidance in Nigeria. In a bid to achieve this, data was collected from the annual reports and accounts of banks quoted on the floor of the Nigerian stock exchange. From the analysis carried out it was observed that return on asset was found to have a positive relationship with tax avoidance. CSR was found to have a positive relationship with tax avoidance. It was also found to be non-statistically significant when tested at 5% level of significance. The last variable which is firm size was found to have a negative relationship with tax avoidance. It was however not found to be statistically significant when tested at 5% level of significance. It was therefore recommended that if an organisation wants to avoid tax it must first of all utilize it resources to the best capacity. Corporate social responsibility is a major means of avoiding taxes due to the fact that the cost involved in engaging in corporate social responsibility is very high so therefore it is lessening the tax burden that is due to an organisation. Also, the size of firm is not a major determinant of the level of tax avoidance.

Keywords: Tax avoidance, Corporate social responsibility (CSR), Firm size

DOI: 10.7176/RJFA/12-8-04

Publication date: April 30^th 2021