MODERATING ROLE OF TAX EXPENSE ON THE RELATIONSHIP BETWEEN FIRM PROFITABILITY AND SHAREHOLDER RETURN AMONG LISTED NATURAL RESOURCE FORMS IN NIGERIA

The study examined the moderating effect of tax expense on the relationship between firm profitability and shareholder return among listed natural resources firms in Nigeria. Specifically, it assessed the effect of net profit margin on return on shareholder funds and determined whether tax expense moderates this relationship. The research adopted an ex-post facto design, relying on secondary data obtained from the published annual reports of four listed natural resources firms covering the period 2015 to 2024. Data were analyzed using the panel estimated Generalized Least Squares (GLS) technique to account for cross-sectional dependence and panel heteroskedasticity. The findings revealed that: Net Profit Margin has a positive and significant effect on Return on Shareholder Funds (β = 0.009845; p = 0.0287); tax expense has a positive but non-significant moderating effect on the relationship between profitability and return on shareholder funds (β = 0.049008; p = 0.6562). The study concluded that variations in tax burdens did not materially influence how profitability translated into shareholder wealth. Based on the finding that net profit margin has a positive and significant effect on return on shareholder funds, management of listed natural resources firms in Nigeria should strengthen internal efficiency by enhancing cost management systems and optimizing revenue generation processes to improve profit margins.