Moderating Role of Cash Holdings on Corporate Governance and Cash-Based Tax Planning

This study examined the moderating role of cash holdings in the relationship between corporate governance and cash-based tax planning of listed non-financial firms in Nigeria. Using data from 56 firms listed on the Nigerian Exchange (NGX) covering the period 2012–2024, the study employed panel regression analysis to assess how board size, board independence, and board gender diversity influence the cash effective tax rate (CETR), and how investing, financing, and operating cash holdings moderate these effects. The results showed that corporate governance significantly affects cash-based tax planning, with board independence and gender diversity reducing tax aggressiveness. Furthermore, investing and operating cash holdings amplified the governance–tax planning link, while financing cash holdings produced weaker moderating effects. These findings suggest that corporate governance mechanisms, when complemented by strategic cash management, can improve firms’ tax planning efficiency. The study recommends that firms strengthen governance structures, align liquidity policies with tax planning strategies, and enhance disclosure on board practices and cash holdings to foster transparency and accountability.