Relationship between profit after tax and corporate social responsibility expenditure in selected banks and manufacturing firms in Nigeria

Abstract

This is a comparative study of the effect of Profit After Tax (PAT) on Corporate Social Responsibility
(CSR) expenditure in selected banks and manufacturing firms in Nigeria. A survey research design was used
while a purposive sampling method was employed to select ten organizations. Specifically, a longitudinal
survey research design was used for the study. This approach was chosen based on the purposes, nature
and the variables that were examined. The data collected and analyzed through content analysis helped to
reveal trends or changes in the subjects over the period of time under study. Secondary data were garnered
from annual reports and accounts of selected companies for a decade, i.e. 2010 to 2019. Inferential statistics
was used to analyse the data while the hypotheses were tested by correlation, ANOVA, and Pooled
Ordinary Least Square (OLS). Result shows F = 35.37 and p = 0.043. Since pvalue is less 0.05, the fstatistics
is significant. Hence, there is a significant difference between PAT and CSR expenditure in selected
organizations. The study recommends that there should be an adjustment to the existing tax law in the
country so that all expenditure on all form of CSR initiatives could be classified as tax deductible expenses.