Tax planning is a contentious issue because of its importance to the governments in raising funds for their activities and its importance to the business organizations in managing, monitoring, and controlling their cash flows. The governments want to collect as much taxes as they can and the business organizations want to pay as little taxes as possible. The difference between what the business organizations want to pay as taxes and the taxes that the government expects from the business organizations made the governments and the business organizations to be on the opposite sides. This study reviewed relevant literature on the usefulness of the tax planning in the survival of the organization and the relevant of the accounting theories. This study employed exploratory research design by reviewing pertinent journal publications and textbooks and traced the usefulness of the tax planning in managing the organizational cash flows. The review of the literature indicated that tax planning, if properly implemented; is a good strategic plan in managing, monitoring, and controlling the cash flows of the business organization. It also discovered tax-favored investments to be a good tool for tax planning as this would attract less government attention. The study concluded that tax planning is a strategic plan that management can use to control the outflows of cash from their business organizations. The study recommended that the business organizations should take advantage of tax planning in controlling their cash flows. It also recommended development of more accounting theories to enhance research in the area of tax planning.
Keywords : Tax planning, organizational survival, tax avoidance, accounting theories.