EFFECT OF TAXATION ON THE FINANCIAL PERFORMANCE OF NIGERIAN MANUFACTURING FIRMS

This study evaluated the effect of taxation on the financial performance of Nigerian manufacturing firms. The objectives were to determine the effect of capital gain tax on return on asset and evaluate the effect of value added tax on profit for Nigerian Manufacturing firms. The study adopted ex-post facto research design. The population of the study comprises all the twenty-five (25) manufacturing firms listed on the Nigeria Stock Exchange as at 31st December, 2024. Multiple (Panel Least Squares) regression analysis were used as the main tool of analysis for test of hypotheses formulated for the study while t-statistics was used as a supporting tool of analysis. The study found that capital gain tax has positive and significant effect on return on assets of Nigerian manufacturing firms with t-statistics of 4.734520 which was greater than 2.0 and probability value of 0.0001 which was less than 0.05. It was equally observed that value added tax has positive and significant effect on return on assets of Nigerian manufacturing firms with t-statistics of 4.889020 which was greater than 2.0 and probability value of 0.0017 which was less than 0.05. In conclusion, the findings of this study revealed a consistent pattern of positive and significant effects of Capital Gain Tax, and Value Added Tax, on the return on assets of Nigerian manufacturing firms. It was recommended among other things that the government should maintain and optimize capital gains tax policies to sustain their positive effect on return on assets of Nigerian manufacturing firms. Tax incentives and regulatory stability can further encourage reinvestment in productive assets, fostering long-term financial growth and industrial expansion.