Abstract:
This thesis draws inspiration from agency theory, Hoffman's tax planning
theory, resource dependency theory, pecking order theory, and legitimacy
theory to investigate the antecedents of tax aggressiveness, the efIect of tax
aggressiveness on financial perfotmance, earnings management and corporate
transparency, and the moderating role of tax risk and corporate governance on
the relationship between tax aggressiveness and financial performance of listed
non-financial firms in Ghana. The study used a two-step system generalised
method of moment (SGMM) approach to analyse the data covering from 20 I 0
to 2019. The study found board size, board gender diversity, non-executive
directors, institutional ownership, and ownership structure to have a significant
positive effect on tax aggressiveness. Political connection and financial
constraints had a significant positive impact on tax aggressiveness while CSR
had mi xed efIects on tax aggressiveness. Tax aggressiveness positi vely affects
firm performance, regardless of the proxy. While the marginal effects of tax
aggressiveness and corporate governance on the relationships between tax
aggressiveness and ROE and ROA were positive, they were negative for
Tobin's Q. The study concluded that firms that engage in tax aggressiveness
have low earnings quality and lack transparency in their dealings. Again, it was
concluded that sound corporate governance structures could smoothen out part
of the agency costs that might arise from opportunistic managerial behaviours,
thereby, improving firm performance - returns on assets and equity. The study
recommends that finns should utilise the services of tax experts and consultants
for effective tax planning.
