Corporate Profitability and Sustainability of Agribusiness Industries in Nigeria: The Tax Effect



Basically, the Companies Income Tax (CIT) policy regimes in Nigeria are divided into two phases, namely, pre-1992 and post-1992 regimes. The CIT policies in the pre-1992 era were narrowly based and characterized by increasing tax rates and overburdening of the taxpayers, which induced negative effects on savings and investment. By constitutional arrangement, the taxation of companies’ in Nigeria is vested in the Federal Tax Authorities (Items 58 & 59 of Part I of 2nd Schedule of 1999 Constitution). Thus, irrespective of where a company is domiciled or located in Nigeria, it falls under Federal Tax jurisdiction. Relevant data for the study were provided by accounting/finance officials of seven quoted agribusiness companies in Nigeria. The test of reliability of the research instrument yielded a coefficient of 0.89, which is very high. Data analysis was carried out using tables, frequencies, percentages, correlation, and regression methods. The results indicated that the prevailing tax rate has moderate effect on the profit after tax of quoted agribusiness companies in Nigeria. It is recommended that the relevant tax authorities should provide more efficient incentive reforms to prevent significant adverse effect on the returns agriculture and other peculiar critical sectors of the Nigerian economy.

Key Words Agribusiness, Corporate profitability, Tax structure, Tax system

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