ABSTRACT

This study investigates the relationship between financial constraints and tax planning behavior in listed companies operating in Nigeria, as with tax planning effectiveness measured by the cash effective tax rate (an inverse measure) and financial constraints divided into short-term and long-term financial constraints. Utilizing data from several sources such as NSE, Morningstar and companies official Website collected from ten (10) firms over a five-year period spanning from 2018-2022 The study test two hypotheses using  OLS .

 The findings reveal that short-term financial constraints exhibit a negative but statistically insignificant relationship with tax planning strategies . Similarly, long-term financial constraints also demonstrate a negative and insignificant impact on tax planning. These results suggest that while financial constraints may pose challenges, they do not significantly impede the ability of banking firms in Nigeria to effectively engage in tax planning. This study contributes to the understanding of tax planning dynamics under financial pressure and highlights the resilience of fundamental tax strategies among these firms.