Abstract: The manufacturing and allied sector in Kenya has been growing at a slower rate than the economy and the Gross Domestic Product has been deteriorating with time. From the year 2010, the sector has witnessed some large manufacturing firms either relocating or restructuring their operations owing to heavy taxation and unfavorable operating environment. Taxes represent a significant cost to firms; it affects a firm’s profitability and almost all financing decisions hence actions designed for reducing corporate tax burden through tax planning are regarded highly. The separation of ownership from control in public listed companies means that tax planning occurs within agency framework. Board of directors play an important role in ensuring shareholders’ wealth maximization which is greatly influenced by tax costs. Despite the Manufacturing sector registering stagnation and declining profits for the last five years, there is reawakened stake in the sector through the Big 4 Agenda which seeks to increase the Gross Domestic Product input of the sector to fifteen percent by 2022. The specific objective of the study was to determine the influence of board size on tax planning by manufacturing and allied firms listed at the Nairobi Securities Exchange, Kenya. Kenya. The study was anchored on agency theory and causal research design was adopted. The target population were the nine firms listed at the manufacturing and allied sector and secondary data was obtained from the audited financial reports. The study findings showed that board size had insignificant effect (β=0.0020, p=0.274) on tax planning among manufacturing and allied firms listed at the Nairobi Securities Exchange at 5 percent significance level. The study recommends that the board size of manufacturing and allied firms listed at the Nairobi Securities Exchange should not be large as this results into bureaucratic conditions.
Keywords: Agency Theory, Board Size, Tax Planning, Manufacturing and Allied Firms, Nairobi Securities Exchange.
Title: BOARD SIZE AND TAX PLANNING AMONG MANUFACTURING AND ALLIED FIRMS LISTED AT THE NAIROBI SECURITIES EXCHANGE, KENYA
Author: Awuor Saphina Ochola, John Mungai, Ambrose Jagongo
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
Vol. 10, Issue 1, April 2022 - September 2022
Page No: 365-370
Research Publish Journals
Website: www.researchpublish.com
Published Date: 07-July-2022
