This study ascertains the impact of taxation on the profitability of companies in Nigeria. The study used secondary sources of data and a time series econometric technique with an error correction model tested the variables most likely to impact on profitability of companies in Nigeria. The study revealed that the level of company tax has significant effect on the profitability, that company income tax (CIT) has significant effect on profitability. We conclude that the positive and significant relation between the profitability and the taxation explanatory variables indicates that policy measures to expand tax revenue through more effective tax administration will impact positively on growing the company’s profitability. It is therefore recommended that Government should expand the tax yield through improved tax system administration. This is because of the positive danger of over-reliance on crude oil export receipts to drive the economy. There should be more improve in the effectiveness of taxation by ensuring proper and equitable tax assessment and timely collection.
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