IMPACT OF MULTIPLE DIRECTORSHIP ON TAX COMPLIANCE OF NONFINANCIAL LISTED COMPANIES IN NIGERIA

Abstract

Generating enough tax revenue is still a universal phenomenon, due to unabated tax scandal. This
study examines the impact of multiple directorship on tax compliance of non-financial listed
companies in Nigeria. Cash Effective Tax Rate (CETR) was used to proxy tax compliance. This
study employed explanatory sequential design of mixed method to collect and analyse quantitative
and qualitative data and merged the data-sets for interpretation of the results.The study explores
data from 68 companies out of 116 non-financial listed companies from 2004 to 2018 due to
incomplete data. While, qualitative data was obtained through semi structured interviews on 17
corporate governance agents. A Generalised Least Squares Regression and Discourse analysis
were used to analyse the quantitative and qualitative data, respectively. The GLS Wald chi-square
result shows that multiple directorship has no significant impact on CETR of non- financial listed
companies in Nigeria. The study concludes that multiple directorships do not have a significant
impact on tax compliance. However, most of the respondents in the qualitative study suggest a strict
restriction on the number of board on which a board member can serve simultaneously, in order to
achieve tax compliance. The study recommends that Financial Reporting Council (FRCN) should
promote a policy that could regulate the maximum number of boards on which a director can serve
simultaneously to a maximum of three boards in line with international practice.