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the last decade, the study of tax aggressiveness has been subject of debate and
thoughts among researchers and regulators in world. Particularly, managers
attach great importance of achieving their organizational goals through the implementation
of tax aggressive activities (Desai & Dharmapala, 2006). Essentially, tax
aggressiveness is a plan or arrangement established for the sole purpose of
avoiding tax (Braithwaite, 2005). And by implication, this leads to significant
costs and benefits for management, and a reduction in cash flows available to
the company and shareholders. From an agency theory, the marginal benefits of
tax aggressiveness to shareholders include greater tax savings for the corporation,
whereas the marginal costs include the potential for tax fines and penalties to
be imposed by the tax administration, implementation costs, reputational costs,
and political costs (Scholes, Wolfson, Erickson, Maydew & Shevlin, 2005;
Slemrod 2004). According to Boussaidi and Hamed, (2015) tax aggressive strategy
is deployed by managers to maximize income after all company’s liabilities owed
to the state and other stakeholders.

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it has been reported that the tax aggressiveness does not take into account the
potential non-tax costs that can accompany it, and particularly those arising
from agency problems (Scholes et al.,
2005). In particular, it is admitted that tax aggressiveness is not only the
reduction of the tax due. The implementation of such strategy to reduce the tax
base allows the generation of high potential non-tax cost that arises from
agency conflicts or tax-authority, such as penalties and rent extraction. For
that, tax aggressiveness is a very specific range of activities because it is
always being surrounded by joint economics transactions which are majorly
organized by the top managers basically to reduce the corporate tax income and
consequently increase the net income (Chen, Chen, Cheng and Shevlin, 2010). This
is further substantiated by Desai and Dharmapala (2006), that tax aggressive
activities are characterized by complexity and obfuscation, which is practically
difficult to detect.  Essentially, tax
aggressiveness represents different tax handling strategies to lower taxable
income that can be legal or illegal. Companies’ tax aggressiveness can be described
in two ways which include determining what kinds of transactions are favourable
under the law (legal tax avoidance) and tax sheltering (Yeung 2010).

management actions designed solely to reduce taxes by setting up tax-aggressive
activities are becoming more common in all companies. And Lanis and Richardson
(2011) found that taxes are a factor of motivation for many decisions made by
managers. In recent times, it has also been established empirically that the
taxes have widely been considered as a motivating factor in many corporations’ decisions.
(Lanis & Richardson 2011; Hanlon & Slemrod 2009; Landolf 2006). It is
increasingly being expected of corporations that they demonstrate to investors
that they are complying with tax rules and regulations, because investors are
aware that tax aggressiveness has a detrimental effect on their investment
returns (Henderson Global Investors 2005).

to Uzun, Szewczyk and Varma (2004), the structure of the board of directors has
an important role to play in monitoring management and governance mechanisms. More
recently, Lanis & Richardson (2011) show that the inclusion of a higher
proportion of outside members on the board of directors reduces the likelihood
of tax aggressiveness. In fact, the board of directors bears the ultimate
responsibility for the tax affairs of the corporation, and is held accountable
for them by shareholders and other stakeholders (Erle 2008; Hartnett 2008).
Landolf (2006) argues that as the risks faced in tax matters have become more varied,
the board of directors must, within the framework of the risk management
strategy of the corporation as a whole, involve itself directly in the
corporation’s tax planning. In other words, studies have shown that the
appointment of female directors is likely to enhance board independence and
improve the shareholders’ wealth (Zalata, Tauringana and Tingbani, 2017). Other
strand of literature stressed that the appointment of female directors
facilitates more informed decisions, enhances the decision-making process, and
improves communication among board members (Bear, Rahman, & Post, 2010;
Daily & Dalton, 2003). In addition, the appointment of female directors
enhances the depth and breadth of discussion and deliberations, particularly
those related to challenging issues (Huse & Solberg, 2006; Srinidhi, Gul,
& Tsui, 2011; Stephenson, 2004).

play an important role in tax matters (Kastlunger et al. 2010; and Fallan, 1999). The authors opined that although
optimizing tax is a legal activity that aims to minimize the tax burden
companies taking advantage of the legal and tax advantages granted by the
State, the interpretations of situations and tax regulations differ depending
on the masculine and feminine characteristics. Thus, female presence on the
board of directors could significantly reduce the likelihood of tax
aggressiveness. Given that women are generally more cautious and less motivated
to bear excessive risks, the gender of the firms’ directors has been suggested
to affect corporate polices and outcomes. (Arun, Almahrog, and Aribi, 2015;
Srinidhi et al, 2011; Adams, and
Ferreira, 2009) indicate that firms with female directors have lower earnings

presence of women on the board, Adams & Ferreira (2009) suggest that their
presence is likely to contribute to improved monitoring. Moreover, by examining
the monitoring intensity of women with respect to retention decisions and
compensation contracts, Adams & Ferreira (2009) demonstrate that women are
stricter monitors than their male counterparts. Also, scholars have suggested
that gender diversity facilitates effective monitoring by broadening expertise,
experience, interests, perspectives and creativity (Erhardt, Werbel, &
Shrader, 2003; van Knippenberg, van Ginkel, & Barkema, 2012).

to Oyeleke, Erin and Emeni, (2016), the interaction of board size with female
directors is significantly associated with the reduced level of tax
aggressiveness. The results are consistent with the ‘women risk aversion’
theory which stipulates that the different attitude of females to excessive
risks can project upon corporate policies and decisions. However, the low
representation of women in executive positions and on the board limits how their
influence is perceived. Similarly, it has been suggested in empirical
literatures that female representation on a firm’s board of directors improves
the board’s functioning and efficiency (e.g., Adams & Ferreira, 2009;
Fondas & Sassalos, 2000; Hillman, Shropshire, & Cannella, 2007).

one of the greatest problems facing

Nigeria, one of the banes of Nigerian Tax System is the problem of tax evasion
and tax avoidance (Adebisi and Gbegi, 2013). These menace has created a great gap
between actual and potential revenue for companies and tax authorities alike. Against
this background, this study intends to female directorship and tax
aggressiveness of listed firms in Nigeria.

1.2       Statement of the problem

Nigerian government has implemented various tax reforms to increase tax revenue
over the years, despite this, statistical evidence has shown that the
contribution of company’s taxes remained relatively low (Alabede, Ariffin and
Idris, 2011). Company taxes have remained relatively low, inefficient and problematic
in Nigerian tax system (Asada, 2005; Kiabel & Nwokah, 2009; Nzotta, 2007;
Odusola, 2006; Sani, 2005). Evidence indicates that tax aggressiveness may not
necessarily increase corporate value (Khurana & Moser, 2013). Empirical
evidence that links tax aggressiveness and corporate value is mixed (Abdul Wahab
& Holland 2012; Desai & Dharmapala, 2009). Uncertainties surrounding
tax aggressiveness and corporate value lead to the question regarding the role
of corporate governance in influencing tax aggressiveness. Ariff and Hashim
(2014) cite two perspectives that involve the role of corporate governance in
tax-management activities. The first perspective is that tax is a ‘boardroom
issue’ because it requires a well-developed strategy to balance lowering tax to
improve the bottom-line performance of firms and secondly, that corporate
governance satisfies the firms’ responsibility as good corporate citizens.

on board gender diversity by Betz, Lenahan and Shephard (1989) find that female
directors are more risk-averse compared to male directors in regards to
corporate reporting and financial matters. Similarly, Peni and Vähämaa (2010)
find that firms with female directors adopt a more conservative, risk-averse
financial reporting style compared to firms with male directors. McLeod-Hemingway
(2007) find that women are likely to contribute positively to the general
functioning and deliberations of the board by enhancing the degree of
trustworthiness of the board to the firm’s various stakeholders. According to Adams
and Ferreira (2009); Srinidhi et al.
(2011), gender-diverse boards of US firms were broadly tougher monitors, with
gender composition of the board being positively associated with board
effectiveness. Higher female participation on the board through more effective
monitoring is likely to reduce tax aggressiveness in the same manner as that
achieved with outside directors.

strand of literatures has examined the importance of gender diversity in risk-taking
and competitiveness of firms (Croson and Gneezy 2009; Charness and Gneezy 2012;
Gneezy, Niederle and Rustichini, 2003; Gneezy and Rustichini 2004; Niederle and
Vesterlund, 2007). This is further substantiated by other studies that even at
the top of corporate ladders, women significantly differ from men, and these
differences may translate into different corporate policies and financial
returns (Faccio, Marchica and Mura, 2016; Huangand and Kisgen 2013; Tate and
Yang 2015).

Nigeria, there are sparse studies on tax aggressiveness, tax avoidance or tax
evasion and revenue in Nigeria (Onyeka, Nnenna and Carol, 2016; Adebisi and
Gbegi, 2013; Alabede, Ariffin and Idris, 2011). However, Oyeleke, Erin and
Emeni, (2016) examined the relationship between the board of directors’ gender
diversity and tax aggressiveness of banks listed on the Nigerian Stock Exchange
(NSE). Firstly, there is a dearth of study in this area. Similarly, the study differs
from previous known studies, by examining female directorship and tax
aggressiveness of listed firms in Nigeria. Hence, this study differs by not
considering the banking sector, but how female directorship influence tax
aggressiveness in listed insurance firms in Nigeria.

1.3       Research


The research addresses the following

i.          what is the pattern of tax
aggressiveness in Nigeria?

ii.         to what extent does women on board affect
tax aggressiveness of listed firms in     Nigeria?

iii.        what is the relationship between female directorship
and firms’ profitability?

iv.        does the interaction of female
directorship and tax aggressiveness influence the board size?





1.4       Objectives
of the Study

            The broad objective of the study is
to investigate the relationship between female directorship and tax
aggressiveness of listed firms in Nigeria. Hence, the specific objectives are
as follows:

i.          critically appraise tax aggressiveness
in Nigeria.

ii.         analyse the relationship between women
on board and tax aggressiveness of listed firms in             Nigeria;

iii.        investigate the effect of female
directorship on tax aggressiveness of listed firms.

iv.        determine the interactive effect of
female directorship and tax aggressiveness on board size

1.5       Research hypotheses

The hypotheses to be tested in the course
of this study are stated below:


H1:       There is a relationship between woman on board and tax
aggressiveness of listed firms in Nigeria.


H1:       female
directorship affects tax aggressiveness of listed firms in Nigeria.


H1:       The
interaction between female directorship and tax aggressiveness influence
relative board size.

1.6       Significance
of the Study

study will contribute to literature in diverse ways, it study adds to the
frontier of knowledge on female directorship and tax aggressiveness in listed
firms in Nigeria. This is necessary to consider whether prior findings can be
observed in another environment different in respect of culture, tax policies and
governance efficiency. It will help firms to understand the significance of
female board members of the tax aggressiveness policy adopted.

Similarly, the study is also important to
tax policy makers since tax aggressiveness could possibly lead to tax evasion
that is detrimental to a country’s revenue base and its public spending. The
study also improves awareness of the users of financial statement and tax
collection bodies on the extent of tax aggressiveness by which huge amounts may
be lost.

This study would be of benefit to a
cross-section of stakeholders like government, revenue officials, students,
lecturers, researchers and accounting professionals.

the study would provide information to policy makers in order to enable them
make better decisions and come up with better reforms for the tax system of the
country. This research would be of immense benefit to lecturers, researchers in
research institutions, students and consultants. For this group of people,
informative materials in certain areas would enhance their research. This
research, would add to the body of knowledge that will assist researchers in
enhancing their work/researches, the areas in which this study has not covered
could be a starting point or suggestion for further research.

1.7       Scope
of the Study

study investigates the effect of female directorship on tax aggressiveness of listed
insurance firms in Nigeria. In order to evaluate this impact, the study is
conducted for the period of eight years that is from 2010 to 2015. The study
period emerges from the fact that there were tax reforms during the period. The
study focused on the insurance sector, to help establish if the findings in
financial sector (banking) is also obtainable in the non-financial sector


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