Tax Planning and Sustainable Growth of Listed Health Care Firms in Nigeria

Vollständiger Abstract

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Abstract This study examined the effect of tax planning on sustainable growth of listed healthcare firms in Nigeria. However, the study specifically sought to examine the effect of effective tax rate on sustainable growth rate of listed healthcare firms in Nigeria, to evaluate the effect of capital intensity on sustainable growth rate of listed healthcare firms in Nigeria, and to determine the effect of thin capitalization on sustainable growth rate of listed healthcare firms in Nigeria. The study adopted an ex-post facto research design with data covering a 10-year period (2015-2024) obtained from Nigerian Exchange Group Fact Books and companies' annual financial reports. The population consisted of seven healthcare firms listed on the Nigerian Exchange Group, all of which were studied using census sampling technique. The study employed Ordinary Least Square (OLS) regression analysis via E-views 10.0 statistical package. The findings revealed that effective tax rate (Coeff. = -0.447262; p-value = 0.0258) has a significant negative effect on sustainable growth rate, capital intensity (Coeff. = 0.112296; p-value = 0.0337) has a significant positive effect on sustainable growth rate, and thin capitalization (Coeff. = 0.087239; p-value = 0.0162) has a significant positive effect on sustainable growth rate of listed healthcare firms in Nigeria. The model gave an R-squared value of 0.587197 with F-statistic of 9.418257 (p-value = 0.016273). The researcher concluded that tax planning when proxied by effective tax rate, capital intensity and thin capitalization has significant effect on sustainable growth of healthcare firms in Nigeria. It was recommended that management of healthcare firms in Nigeria should engage in strategies that reduce effective tax rate to increase cash tax savings, engage in capital intensive investments to benefit from capital allowances, and finance significant portions of assets through long-term debt to enjoy interest tax shields.