Strategic Planning and Transfer Pricing Regulations Implementation in Nigeria: The Mediating Role of Human Resource Capability

Abstract: The study examined the effect of strategic planning as an antecedence of transfer pricing regulations implementation. Also, it determined the mediating effect of human resource capability on the functional relationship between strategic planning and transfer pricing regulations in Nigeria’s Federal Inland Revenue Service (FIRS). A validated questionnaire was employed to gather data from 612 staff members of the FIRS whose duties are performed in the international tax and other relevant departments. A partial least-square-structural equation model was used to examine the three-way mediation hypotheses. The findings indicate that the specific indirect effect of human resource capability as it affects the functional relationship between strategic planning and transfer pricing regulations is statistically significant and suggests that a full mediating effect was achieved (ꞵ= 0.185, t = 2.421, p = 0.016). The study concluded that the effect of strategic planning on transfer pricing regulations implementation in Nigeria by the Federal Inland Revenue Service is explained by its human resources capability. The study contributes to recent empirical submission on the antecedence of transfer pricing regulations in Nigeria. Likewise, it offers the boundary conditions to explain how strategic planning influences successful implementation of transfer pricing regulations in Nigeria. The complementary role played by public interest theory of regulation and the dynamic capacity theory in serving as the theoretical underpinnings for this study is another contribution to knowledge. This study recommends that the management of Federal Inland Revenue Service should continue to enhance its commitment to efficient transfer pricing regulations implementation given the revenue needs of the federal government to drive economic and infrastructure development. This can be achieved through continuous strategic planning and systematically developing its human resource capability to understand the dynamism in transfer pricing regulations.