Corporate Social Responsibility Practice and Company Income Tax Payment in Deposit Money Banks in Nigeria

Abstract

To ameliorate the inadequate provision of amenities by the government, the incorporated companies choose to give back to their communities through the concept of corporate social responsibility (CSR) practice. This study intends to examine the effect of corporate social responsibility on corporate tax payment of listed manufacturing companies in Nigeria. A simple linear regression analysis was conducted using secondary data collected from financial statements of 5 selected deposit money banks in Nigeria. The result indicates a very weak relationship between the company income tax payment and the corporate social responsibility practice among deposit money banks in Nigeria (R = 0.034). It also indicated that only 1% of variation in the payment of company income tax is affected by corporate social responsibility practice. The regression coefficient of corporate social responsibility is (β = -0.025) and it is not statistically significant, which implies that a unit increase in CSR will result in 0.025 reduction in corporate tax payment. The study accept the null hypothesis that there is no significant effect of company income tax payment on corporate social responsibility practice of deposit money banks in Nigeria. It was recommended that deposit money banks should perform corporate social responsibility on societal basis and not on management discretion, there should be established bench mark for corporate social responsibility payment like that of company income tax payment and Voluntary tax compliance be encouraged among deposit money banks as company income tax is not the only tax liability that is due on them.