THE RELATIONSHIP BETWEEN CORPORATE TAX AVOIDANCE AND FINANCIAL PERFORMANCE IN NIGERIAN MULTINATIONAL COMPANIES

Abstract

This study examined the relationship between corporate tax avoidance and the financial performance of multinational companies operating in Nigeria. Survey data collected from 189 respondents revealed that tax avoidance practices are widely adopted, with nearly 60% of companies frequently engaging in such strategies. Most respondents reported that tax avoidance positively impacts profitability, particularly improving key financial indicators such as Return on Equity and Return on Assets. However, there was also a strong awareness of the potential long-term financial risks, with over 70% perceiving moderate to very high risk from continuous use of tax avoidance. Opinions on the effect of tax avoidance on long-term sustainability were mixed, with nearly half viewing it as positive and a significant minority indicating negative implications. These findings suggest that while tax avoidance remains an important financial tool, Nigerian multinational firms must carefully weigh immediate benefits against long-term sustainability challenges. The study recommends enhanced governance, balanced tax planning, and proactive engagement with regulatory authorities to foster responsible tax strategies