Tax Aggressiveness, Corporate Social Responsibility, and Firm Reputation Among Nigerian Listed Firms

This study empirically examines the relationship among tax aggressiveness, corporate social responsibility reporting, and firm reputation in companies listed on the Nigerian Exchange Group. Growing scholarly interest in the intersection of corporate taxation and social responsibility has produced mixed findings globally, with some evidence suggesting that high CSR firms use tax aggressiveness as a substitute for genuine social contribution, while others find CSR and tax compliance to be complementary ethical commitments. The Nigerian context, with its regulatory fragmentation and reputational sensitivity to social perception, provides a unique empirical setting. This study uses panel data from 40 listed companies across multiple sectors for the period 2018 to 2023. Tax aggressiveness is measured using effective tax rate deviation, book-tax difference, and Desai-Dharmapala residual tax shelter activity. CSR is proxied by a disclosure index derived from annual and sustainability reports. Firm reputation is measured using media sentiment analysis and analyst ratings. Fixed effects panel regression and Hausman-Taylor estimation are applied. Results indicate a negative relationship between tax aggressiveness and firm reputation, which is partially moderated by CSR reporting quality. Companies with high CSR disclosure and high tax aggressiveness experience the most significant reputational penalties, consistent with hypocrisy signaling theory. The study concludes that Nigerian investors and stakeholders penalize inconsistency between social responsibility claims and tax behavior. It recommends that corporate boards adopt integrated value frameworks that align tax strategy with CSR commitments.

Keywords: tax aggressiveness, CSR, firm reputation, book-tax difference, Nigerian Exchange Group.