Board Characteristics and Tax Planning: Evidence from Manufacturing Firms Listed at the Nairobi Securities Exchange

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Published Aug 2, 2025
https://doi.org/10.70907/qbhm5q77
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Vol. 19 No. 8 (2025): Research Beacon Journal

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Emily Boke Mwita
Kenyatta University
Moses Odhiambo Aluoch
Kenyatta University

Abstract





Tax planning plays a critical role in enhancing the financial efficiency and regulatory compliance of listed manufacturing firms. In Kenya, where firms operate under dynamic tax legislation and increasing regulatory oversight, board characteristics have become an important determinant of effective tax planning. This study examined the influence of board characteristics—specifically board size, board age, board meeting frequency, and board education—on the tax planning practices of manufacturing firms listed at the Nairobi Securities Exchange (NSE). Anchored on stakeholder theory and resource-based theory, the study employed a descriptive research design and utilized secondary data drawn from financial statements and corporate governance reports of all eight NSE-listed manufacturing firms over the period 2019 to 2023. Tax planning was measured using the effective tax rate (ETR), while board attributes were captured using firm-level indicators. Data were analyzed using multiple regression analysis, with diagnostic tests conducted to ensure robustness. The findings revealed that board size, board age, and board education had a statistically significant influence on tax planning, while board meeting frequency had a weaker, marginal effect. The study concludes that board composition plays a pivotal role in shaping tax strategies and recommends that firms maintain optimal board sizes, appoint experienced and well-educated directors, and ensure board meetings incorporate strategic tax planning agendas. These insights offer practical implications for corporate governance reforms and tax policy development within the manufacturing sector in Kenya.





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Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Author Biographies

Emily Boke Mwita, Kenyatta University

Department of Accounting and Finance

Moses Odhiambo Aluoch, Kenyatta University

Department of Accounting and Finance

How to Cite
Mwita, E., & Aluoch, M. O. (2025). Board Characteristics and Tax Planning: Evidence from Manufacturing Firms Listed at the Nairobi Securities Exchange. Research Beacon, 19(8), 86-98. https://doi.org/10.70907/qbhm5q77

How to Cite

Mwita, E., & Aluoch, M. O. (2025). Board Characteristics and Tax Planning: Evidence from Manufacturing Firms Listed at the Nairobi Securities Exchange. Research Beacon, 19(8), 86-98. https://doi.org/10.70907/qbhm5q77

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