Corporate Social Responsibility and Tax Aggressiveness of Quoted Oil and Gas Firms in Nigeria

Corporate Social Responsibility (CSR) involves firms voluntarily engaging in practices that promote social good, which often includes ethical business practices, environmental stewardship, and community engagement. Investigating how CSR commitments correlates with tax aggressiveness necessitated this study. The study examined corporate social responsibility and tax aggressiveness of quoted oil and gas firms in Nigeria. The population of the study consists of twelve (12) quoted oil and gas firms in Nigeria. Secondary data was obtained from the audited annual financial reports of the quoted oil and gas firms in Nigeria from 2014 - 2023. Hypotheses formulated were tested using panel least squares regression through pooled effect, fixed effect, and random effect, determined by the Hausman test, fixed effect regression was preferred for results interpretation with the aid of E-views 10 econometric statistical software. Findings shows that corporate donations and social cost is negative (-3.056199) and significant at (0.0000). This negative impact of DSOC led to reduction in effective tax rate which is favourable to tax aggressiveness while, environmental cost is negative (-0.014754) and insignificant at (0.4268) to effective tax rate. This connotes that a rise in EVC by 1 unit will cause effective tax rate to reduce by 0.014754. The adjusted R-squared of 0.642196 suggests that DSOC and EVC account for roughly 64.2% of the variation in ETR, with the remaining 35.8% attributed to other factors not considered in this study. The study concludes that donations, social costs and environmental cost were the factors of corporate social responsibility that led to a decrease in the effective tax rate. The study therefore, recommends that given the significant negative impact of social costs (Donations) on tax aggressiveness, companies may consider increasing their social responsibility initiatives. This will not only reduce their tax liability but also enhance their corporate image and stakeholder relations. Finally, since environmental costs do not show a significant impact on tax aggressiveness, companies should re-evaluate their environmental strategies to ensure they are effectively managing costs since there are no significant tax benefits.