Tax Avoidance Practices and Corporate Social Responsibility Among Multinational Companies Operating in Nigeria

The apparent contradiction between aggressive tax avoidance strategies and corporate social responsibility (CSR) commitments by multinational corporations (MNCs) in Nigeria has generated increasing scrutiny from civil society, tax authorities, and academic researchers in recent years. This study examined the relationship between tax avoidance practices and corporate social responsibility among multinational companies operating in Nigeria, with a focus on firms in the fast-moving consumer goods and telecommunications sectors. The study was grounded in stakeholder theory, which argues that corporations are accountable to a broad range of societal interests beyond profit maximization. A documentary and survey research design was adopted, with a population of 180 tax professionals, CSR officers, and regulatory officials connected to 15 selected MNCs. A sample of 123 respondents was drawn through purposive sampling, complemented by content analysis of CSR reports. Data were analyzed using ordinal logistic regression and content analysis matrices. Findings indicated that firms with higher effective tax avoidance scores tended to report more extensive CSR disclosures, suggesting a potential use of CSR as a legitimizing tool for tax reduction strategies. The study concluded that tax avoidance and CSR reporting among MNCs are not independent activities but may be strategically interrelated to manage reputational risks. It was recommended that the Federal Inland Revenue Service should establish a CSR-tax compliance integration framework to discourage the use of CSR as a cover for tax avoidance.

Keywords: Tax avoidance, corporate social responsibility, multinational companies, stakeholder theory, legitimacy