TAX PLANNING AND FINANCIAL PERFORMANCE: EVIDENCE FROM NIGERIAN LISTED FIRMS

This study explored the effect of Tax optimization on the Financial Performance of Airlines in Nigeria. The study's specific objectives were to examine the influence of capital intensity and research & development on the Financial Performance of Airlines in Nigeria. The population of this study is 7 leading and serviceable domestic airlines (Air Peace, Arik Air, Dana Air, Aero Contractors, Overland Air, Max Air, and Ibom Air) operating within the Nigerian aviation industry. Census sampling was used for the study. The study utilized secondary data. Data for this study was obtained from the published annual reports of seven purposively selected leading domestic airlines in Nigeria and National Bureau of Statistics (NBS). The secondary data were collected from income statement and statements of financial position of the selected airlines over a period of five years (2018–2022). Descriptive statistics was used to define the data, measure the central tendencies and dispersions. Inferential statistics such as pooled Ordinary Least Squares (OLS) regression was used to estimate concepts and test formulated hypotheses. The results show that capital intensity has positive significant effect on the financial performance of airlines in Nigeria, while research & development have a negative but insignificant effect on financial performance of airlines in Nigeria. The study recommends that Government and/or private investors should encourage and support increased investment in capital assets within the aviation sector through policies that provide financial incentives or subsidies for purchasing and maintaining physical assets like aircraft and infrastructure. Airlines and Government should implement a balanced approach to managing R&D expenditures by providing targeted support and incentives for airlines and/or businesses to invest in innovation while ensuring that these investments are aligned with long-term strategic goals.