Abstract
This study investigated the impact of environmental taxation on the corporate financial performance (Return on Equity, ROE) of listed manufacturing companies in Nigeria. Specifically, the study examined how carbon tax, energy tax and pollution tax impacted on corporate financial performance of manufacturing companies in Nigeria. An ex post facto research design was employed, using secondary data from three purposively sampled companies (UAC of Nigeria Plc, PZ Cussons Nigeria Plc, and Dangote Cement Plc) listed on the Nigerian Exchange Group (NGX). Multiple linear regression analysis was used to analyze the relationship between the environmental taxes and ROE. The findings revealed a statistically insignificant relationship between the combined environmental taxes and ROE (R² = .086, F = .395, p = .846). Furthermore, none of the individual environmental taxes demonstrated a significant relationship with corporate financial performance. The study concludes that, based on the analyzed data, the examined environmental taxes do not appear to have a significant impact on the ROE of the selected manufacturing companies. It is recommended that future research explore other potential determinants of ROE and investigate the complexities of environmental taxation’s influence on corporate financial performance, potentially considering non-linear relationships or moderating factors.
Key Words: Carbon Tax, Energy Tax, Pollution Tax, Return on Assets, Nigeria