Title: Consequences of Corporate Tax on Dividend Policy of Selected Firms in Nigeria
Authors: Ugwu, Ikechukwu Virginus Ph.D
Volume: 8
Issue: 9
Pages: 124-133
Publication Date: 2024/09/28
Abstract:
The study evaluated the consequences of corporate tax and dividend policy DVP of listed firms in Nigeria from (2012-2022). Sample size purposively selected six firms with the highest dividend yield stock out of the population of ten firms with the highest dividend yield stock within the period. To achieve this, three variables of corporate tax: company income tax CIT, education tax ETAX and value added tax VAT were applied to determine their consequences on corporate DVP. Research analyses methods applied the following statistical models: Descriptive statistics, Pearson Correlation, Unit Root, Error Correction and Panel ordinary least square. The model showed an overall significant at 5% level. Further, the model values showed about R-square 0.92 (92%), and adjusted R-square 0.93 (93%) of the systematic variations in the dependent variable (DVP), was individually and jointly explained by the independent variables; while the unexplained part of the dependent variable were outside the scope of this study. Other results showed that: CIT and VAT are negative and significant; while ETAX is negative and non-significant on the pooled firms' DVP for the period considered. Recommendations are that: government should not indiscriminately raise tax rate because it can negatively change firms' DVP; and possibly reduce investing interests in such corporate shares. The study contributes with: the variables that were positive and significant on DVP in Nigeria, the modernized models and the empirical literatures for academia.