TAX AVOIDANCE STRATEGIES AND EARNINGS PER SHARE OF LISTED CONSTRUCTION/REAL ESTATE COMPANIES IN NIGERIA

Obeten Ekem Onyo; Egbe Solomon

doi:10.5281/zenodo.23857334

Obeten Ekem Onyo Department of Accounting, Faculty of Management Sciences, University of Port Harcourt
Egbe Solomon, Professor Department of Accounting, Faculty of Management Sciences, University of Port Harcourt

DOI: https://doi.org/10.5281/zenodo.23857334

Keywords: Tax avoidance strategies; Effective tax rate; Capital intensity; Earnings per share.

Abstract

This study examined the impact of tax avoidance strategies on earnings per share of listed construction/real estate companies in Nigeria, with specific focus on the effects of effective tax rate and capital intensity on earnings per share. An ex-post facto research design was adopted, using secondary financial data obtained from the published annual reports and financial statements of purposively selected listed construction/real estate companies in Nigeria. Effective tax rate was measured as total tax paid divided by profit before tax, while capital intensity was measured as non-current assets divided by total assets. Earnings per share was obtained from the annual reports and financial statements of the selected companies. The data were analysed using descriptive statistics and panel regression analysis. The Levin, Lin and Chu and Im, Pesaran and Shin unit root tests were conducted to establish the stationarity of the panel data, while pooled, fixed-effects and random-effects models were considered for the panel estimation. The findings revealed that effective tax rate had a positive and significant impact on earnings per share (β = 1.049, p = .001), while capital intensity had a positive but insignificant impact on earnings per share (β = 0.886, p = .318). The study concluded that effective tax rate was significantly associated with earnings per share, whereas capital intensity did not have a statistically significant impact on earnings per share of listed construction/real estate companies in Nigeria. The study recommended that management should strengthen tax planning by identifying legitimate tax credits, deductions, capital allowances and other applicable incentives while maintaining compliance with Nigerian tax laws. It further recommended that investment in non-current assets should be guided by rigorous commercial viability assessments to ensure that fixed assets generate sufficient revenue, cost savings or productivity gains to justify the capital committed.

Downloads

Download data is not yet available.

References

Abdullah, A., & Abdelmoneim, B. M. W. (2025). The impact of tax avoidance on earnings management: the moderating role of board governance characteristics. International Journal of Financial Studies, 13(4), 2-25.

Abdullahi, B. A., Norfadzilah, R., Umar, A. M., & Lateef, S. A. (2021). The impact of corporate tax planning on the financial performance of listed companies in Nigeria. International Journal of Economics, Management and Accounting, 29(2), 273-297.

Ado, A. B., Rashid, N., Mustapha, U. A., & Ademola, L. S. (2021). The impact of corporate tax planning on the financial performance of listed companies in Nigeria. International Journal of Economics, Management and Accounting, 29(2), 273-297.

Akpan, D. C., Ukpe, S. A., Nwayen, A. I., & Akai, N. D. (2025). Tax planning and sustainable growth of listed conglomerates in Nigeria. World Journal of Finance and Investment Research, 9(7), 1–15. https://doi.org/10.56201/wjfir.v9.no7.2025.pg1.15

Akpan, D. C., Ukpe, S. A., Nwayen, A. I., & Akai, N. D. (2025). Tax planning and sustainable growth of listed conglomerates in Nigeria. World Journal of Finance and Investment Research, 9(7), 1-15.

Anindita, R. I., Irawan, F., Firmansyah, A., Wijaya, S., Qadri, R. A., Sumantri, J., Andriani, A. F., & Mahrus, M. L. (2022). The impact of thin capitalization rules on capital structure and tax avoidance. Journal of Governance and Regulation, 8-14.

Aondoakaa, K., Iortima, T., Achika, C. T., & Atum, E. I. (2022). Tax planning and firm value: evidence from financial services companies listed in Nigeria. Journal of Accounting, Business and Social Sciences, 6(1), 15-26.

Aondoakaa, K., Upaa, J. U., & Iortima, T. (2022). Corporate governance attributes and tax planning: evidence from listed financial services companies in Nigeria. ADSU Journal of Accounting Research, 8(1), 18-32.

Armaya’u, A. S., Isah, U. K., Mujeeb, S. M. A., Ghousia, K., Zameer, P., & Ahmed, H. A. (2024). Gauging the connection between ownership structure and tax avoidance of listed innovative firms in Nigeria. Compendium by PaperAsia, 41(1), 35-44.

Ayoola-Akinjobi, O. O. (2024). Tax aggressiveness and financial performances of financial institutions in Nigeria. International Journal of Management Science and Business Analysis Research, 4(7), 25-32.

Basher, T., & Zachariah, P. (2020). Ownership structure and tax planning of listed forms: evidence from Nigeria. Journal of Accounting and Taxation, 12(3), 99-107.

Boniface, U. E. (2025). Income smoothing and its impact on shareholders wealth creation: evidence from firms in the Nigerian financial services sector. Retrieved from http://dx.doi.org/10.2139/ssrn.5168022

Bwala, I. F., Ibrahim, M., & Gurama, Z. (2024). Tax planning and the value of listed commercial banks in Nigeria. International Journal of Intellectual Discourse, 7(1), 167-180.

Donaldson, L., & Davis, J. H. (1991). Stewardship theory or agency theory: CEO governance and shareholder returns. Australian Journal of Management, 16(1), 49–64. https://doi.org/10.1177/031289629101600103

Duo-Duo, G. O. (2025). Corporate tax planning and tax avoidance of commercial banks in Nigeria. International Journal of Business Economics and Management Science, 9(7), 104-127.

Eche, G., Gimba, J. T., & Vincent, H. S. (2023). Corporate tax planning and financial performance of listed deposit money banks in Nigeria. AFIT Journal of Marketing Research, 3(1), 6-19.

Edet, J. P., & Charles, S. S. (2024). Capital structure decisions and shareholders’ wealth maximization of quoted consumer goods companies in Nigeria. Journal of Accounting and Financial Management, 10(9), 355-381.

Edidiong, K. A., & Egbe, S. (2025). Tax aggressiveness nexus on internal efficiency and customer loyalty: evidence from Nigeria. IRASS Journal of Economics and Business Management, 2(7), 7-16.

Efenyumi, P. M. E., & Nworie, G. O. (2025). Tax planning and shareholders wealth maximization among listed banks in Nigeria. International Journal of Financial Accounting and Management, 7(1), 91-104.

Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of Management Review, 14(1), 57–74. https://doi.org/10.5465/amr.1989.4279003

Eneh, O. M. (2022). Tax planning and firm value of quoted food and beverages firm in Nigeria. International Journal of Research, 9(1), 457-465.

Ezirim, C., & Nwakanma, C. (2024). The effect of creative accounting on the job performance of accountants (auditors) in reporting financial statement in Nigeria. Kuwait Chapter of Arabian Journal of Business and Management Review, 3(5), 1-30.

George, O. B., & Okolie, A. O. (2025). Corporate tax planning and financial performance of listed oil and gas companies in Nigeria. Journal of Accounting and Financial Management, 11(6), 367-382.

Hassan, N., Masum, M. H., & Sarkar, J. B. (2022). Ownership structure and corporate tax avoidance: evidence from the listed companies of Bangladesh. Polish Journal of Management Studies, 25(1), 147-161.

Hiifan, I. M., Aondoakaa, I., & Gbulum, T. T. (2025). Effect of tax planning on the financial performance of listed consumer goods companies in Nigeria. IIARD International Journal of Economics and Business Management, 11(8), 243-259.

Hyungjih, C., Jeong-Hoon, H., Taejin, J., & Yewon, K. (2022). Controlling shareholders’ value and corporate tax avoidance. Retrieved from https://www.ssrn.com/abstract

Igbinovia, I. M., & Usman, T. M. (2024). Tax avoidance, tax planning strategies and firm value of manufacturing firms in Nigeria. FUOYE Journal of Accounting and Management Sciences, 7(1), 185–202.

Igbinovia, I. M., & Usman, T. M. (2024). Tax avoidance, tax planning strategies and firm value of manufacturing firms in Nigeria. Fuoye Journal of Accounting and Management, 7(1), 185-202.

Ihenyen, C. J., Boabai, F. M., & Bereh, Y. (2025). Beyond tax compliance: investigating the nexus between corporate tax liabilities on shareholders welfare maximization of companies in Nigeria. GSAR Journal of Economics and Finance, 1(1), 7-15.

Ihenyen, C. J., Boubai, F. M., & Bereh, Y. (2025). Beyond tax compliance: Investigating the nexus between corporate tax liabilities on shareholders wealth maximization of companies in Nigeria. GSAR Journal of Economics and Finance, 1(1), 7–15.

Ihenyen, C. J., Kobon, M. T., & Apiribo, A. (2025). Tax planning and firm value of oil and gas companies in Nigeria. International Journal of Research Publication and Reviews, 6(12), 2189-2196.

Ishola, R. A., Folajimi, F. A., & Chimeruo, V. O. (2020). Tax planning strategies and profitability of quoted manufacturing companies in Nigeria. Journal of Finance and Accounting, 8(3), 148-157.

Jaffar, R., Derashid, C., & Taha, R. (2021). Determinants of tax aggressiveness: empirical evidence form Malaysia. Journal of Asian Finance, Economics and Business, 8(1), 179-188.

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behaviour, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X

Kibiya, I., Sani, A., Mohammed, S., Usman, M., & Umar, A. (2024). Tax planning and value of listed non-financial firms in Nigeria: The mediating effect of profitability. Eurasian Journal of Management & Social Sciences, 5(2), 41–54. https://doi.org/10.23918/ejmss.V5i2p41

Kibiya, I., Sani, A., Mohammed, S., Usman, M., & Umar, A. (2024). Tax planning and value of listed non-financial firms in Nigeria: the mediating effect of profitability. Eurasia Journal of Management and Social Sciences, 5(2), 41-54.

Kwaghfan, A., Luper, L., Gbulum, T. T., & Tersoo, T. (2025). Effect of corporate performance on tax planning of listed consumer goods companies in Nigeria. International Journal of Economic Research and Financial Accounting, 3(3), 708-714.

Maharana, A. K., & Panda, P. (2025). Exploring the relationship between tax planning and firm performance: a meta-analysis approach. Thailand and The World Economy, 43(1), 106-116.

Mamidu, A. I., & Fapohunda, S. A. (2025). Tax planning strategies and firm value of listed manufacturing companies in Nigeria: an empirical investigation. International Journal of Research Publication and Review, 6(7), 2429-2437.

Mieseigha, E. G., & Okewale, J. A. (2021). Tax aggressiveness and firm value: evidence from industrial goods companies on the Nigerian exchange group. Tax Article, 61-69.

Mwandu, R. P., & Benjamin, A. (2024). Does corporate social responsibility expenditure influence tax avoidance? Evidence from Tanzanian listed firms. African Journal of Economics and Sustainable Development, 7(1), 1-12.

Nwajei, I. M., John-Akamelu, C. R., & Osegbu, I. F. (2025). Tax aggressiveness and growth of listed consumer goods firms in Nigeria. International Review of Financial Studies, 2(3), 1-25.

Obelogu, M. I., & Olatunde, J. O. (2023). Firms’ characteristics and tax aggressiveness of listed companies in Nigeria. Proceedings of the 7th Annual International Conference on Accounting and Finance. In: Disruptive Technology: Accounting Practices, Financial and Sustainability Reporting.

Obiora, F., Onuora, J. K. J., & Aniagboso, I. C. (2022). Tax aggressiveness and sustainability of quoted firm in Nigeria. Journal of Accounting and Financial Management, 8(2), 96-108.

Ogbonna, U. G., Eze, E., & Titus, O. (2022). Tax planning and shareholders wealth maximization of deposit money banks in Nigeria. West African Journal of Business and Management Sciences, 10(1), 131-148.

Olaniun, I., Jimoh, N., Shuaibu, H., & Ibrahim, Y. K. (2022). Tax aggressiveness and financial performance of listed industrial goods firms in Nigeria. Gusau Journal of Accounting and Finance, 3(2), 1-15.

Ombugu, T. T., & Udeh, F. N. (2024). Firm characteristics and tax aggressiveness of listed conglomerate firms in Nigeria. International Journal of Innovative Finance and Economics Research, 12(1), 133-142.

Onyeka-Iheme, C. V. (2021). Tax planning strategies and liquidity of manufacturing companies quoted in Nigeria. American Journal of Humanities and Social Sciences Research, 5(2), 138-148.

Osho, A., & Adisa, L. A. (2022). International transfer pricing and tax disclosure on multicultural companies in Nigeria. KIU Interdisciplinary Journal of Humanities and Social Sciences

Oyedokun, G. E., & Taiwo, A. O. (2022). Tax incentives and financial performance of small and medium enterprises in Nigeria. Journal of Taxation and Economic Development. Chartered Institute of Taxation of Nigeria, 21(2), 62-78.

Oyeshile, O. K., & Adegbie, F. F. (2020). Corporate tax planning and financial performance of quoted food and beverages firms in Nigeria. Journal of Finance and Accounting, 8(6), 266–275. https://doi.org/10.11648/j.jfa.20200806.13

Oyeshile, O. K., & Adegbie, F. F. (2020). Corporate tax planning and financial performance of quoted food and beverages firms in Nigeria. Journal of Finance and Accounting, 8(6), 272-281.

Tackie, G., Agyei, S. K., Bawuah, I., Adela, V., & Bossman, A. (2022). Tax planning and financial performance of insurance companies in Ghana: moderating role of corporate governance. Cogent Business and Management, Taylor and Francis Journals, 9(1), 44-97.

Umeh, V. C., Okegbe, T. O., & Ezejiofor, R. A. (2020). Effect of tax planning on firm value of quoted consumer goods manufacturing firms in Nigeria. International Journal of Finance and Banking Research, 6(1), 1-10.

Woyengibuomo, T. (2024). Tax aggressiveness and earnings management: evidence from listed commercial banks in Nigeria. South Asian Research Journal of Business Management, 6(5), 335-339.

Zubairu, A., Adigizey, J., & Tivde, K. J. (2022). Effect of firm attributes on tax aggressiveness of listed industrial goods companies in Nigeria. UMM Journal of Accounting and Financial Management (UMMJAFM), 2(1), 1-21.