Testing the Tax Impact Role on Corporates Financial Performance

An Applied Study of a Sample of Institutions in the Field of Algerian Construction and Public Works during the Period (2016-2020)

Abstract

The study aims to test the role oftax impact on the financial performance of institutions, tax savings (Tax Savings) and cash effective tax rate (Cash ETR) were considered as an indicator of tax impact, and the rate of return on assets (ROA) as an indicator of financial performance. The study was conducted on 07 institutions in the Algerian construction and public works sector during the period from 2016-2020. Relying on the outputs of the Eviews10 program to interpret the multiple linear regression model, the results concluded that there is a positive effect of tax impacton financial performance, through a big positive significant relationship between tax savings
and financial performance, and a weaknegative significant relationship between cash effective tax rate and financial performance.