Board attributes, financial literacy and tax avoidance of listed deposit money banks in Nigeria

Abstract

This study examines the moderating effect of board financial literacy on the relationship between board attributes and tax avoidance practice of listed deposit money banks in Nigeria for the period of 10 years (2014 to 2023). Secondary data was sourced from the annual reports of all the thirteen (13) deposit money banks in Nigeria. The study employed the panel data methodology for analysis. The result reveals that board size has a positive and significant impact on tax avoidance practice of listed DMBs in Nigeria. Board independence, board gender diversity and board meetings have positive and insignificant effect on tax avoidance practice of listed DMBs in Nigeria. Board financial literacy has a negative and significant effect on tax avoidance practice of listed DMBs in Nigeria. The study establishes that board financial literacy significantly moderates the relationship between board attributes and tax avoidance practice of listed DMBs in Nigeria. Therefore, the study concludes that board size and financial literacy play a pivotal role in shaping tax avoidance practices among listed DMBs in Nigeria and emphasizes the necessity of promoting financial literacy among board members as a key strategy for improving governance effectiveness and ensuring balanced tax strategies. This study further recommends that banks in Nigeria should consider the inclusion of board members with financial expertise. These can help strengthen governance frameworks and ensure that tax practices are both ethical and strategically sound.