OWNERSHIP VARIATION AND TAX AGGRESSIVENESS: UNOBSERVED EFFECT MODEL APPROACH

Abstract

This research investigates the impact of ownership variation on the tax aggressiveness of listed firms in Nigeria. The study used a longitudinal design. The population for the study consists of one hundred and fifty-five (155) listed companies on the Nigerian Exchange Group (NXG) Plc. Judgmental sampling with the help of filter criteria was employed to sample ninety-two (92) Nigerian publicly listed companies. Secondary data were extracted from the published annual reports and accounts of 92 firms listed on the Nigerian Exchange Group Plc over 10 years (2015–2024), comprising 920 observations. The data were analysed using the Unobserved Effects Model (fixed and random effects), supported by pooled OLS and Hausman specification tests. The results indicate that institutional ownership and foreign ownership were negatively and significantly related to the book-tax difference of listed firms in Nigeria. The findings also show that public ownership was positively and significantly associated with the book-tax difference. The study recommends that listed firms in Nigeria should proactively engage institutional shareholders through more detailed tax-related disclosures in annual reports and investor briefings, including explanations of effective tax rates and major tax planning strategies. It also recommends that regulators (FRCN and SEC Nigeria) should also pay special attention to widely held firms in risk-based supervision and consider requiring enhanced tax disclosure for companies with highly dispersed shareholding.