THE IMPACT OF COMPANY INCOME TAX (CIT) PAYMENTS ON THE PROFITABILITY OF NIGERIAN MANUFACTURING FIRMS
Keywords:
Company income tax, profitability, manufacturing firms, Nigeria, tax burdenAbstract
This study investigates the impact of Company Income Tax (CIT) payments on the profitability of Nigerian manufacturing firms. The manufacturing sector is very important for Nigeria's economy. It provides jobs and helps the country grow. However, many manufacturing firms are struggling to make good profits. One reason for this problem is the high tax burden they face. Company Income Tax is a major cost for these firms. It reduces their net income and affects their ability to reinvest in their businesses. This study used a descriptive survey research design. A sample of 120 accountants and finance managers from 60 manufacturing firms was selected. Data was collected using a structured questionnaire. The data was analyzed using mean scores and chi-square tests. Findings showed that Company Income Tax payments have a significant negative impact on the profitability of manufacturing firms. The study also found that the high CIT rate reduces the funds available for reinvestment. This limits the growth and expansion of these firms. The study concludes that the current CIT regime poses a major threat to the survival and growth of Nigerian manufacturing firms. It recommends that the government should review the CIT rate. It also calls for more tax incentives for manufacturing firms. This will help them become more profitable and competitive.
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