Non‑oil Tax Worries Grow As Company Income Tax Drops 31% in Q1

Nigeria’s Company Income Tax receipts fell sharply in the first quarter of 2026, data from the National Bureau of Statistics (NBS) show, reflecting weaker corporate tax performance across several sectors despite notable contributions from financial services, mining and manufacturing.

The NBS reported that Company Income Tax (CIT) collections amounted to N1.37 trillion in Q1 2026, down 8.08 per cent from N1.49 trillion in Q4 2025. On an annual basis, collections dropped 31.05 per cent from the same quarter in 2025, underscoring strains on corporate earnings and tax generation.

Foreign companies accounted for the bulk of CIT receipts in the quarter, paying N828.82 billion, while domestic firms contributed N538.91 billion.

Foreign firms therefore supplied more than 60 per cent of total CIT revenue, highlighting the continued significance of multinationals to government non-oil revenue.

Sectoral performance was mixed. Water supply, sewerage, waste management and remediation activities posted the largest quarter-on-quarter increase in CIT payments at 485.71 per cent, followed by activities of households as employers and undifferentiated goods and services-producing activities for own use, which rose 197.04 per cent.

By contrast, agriculture, forestry and fishing recorded the steepest decline, with CIT receipts down 73.52 per cent, and construction fell by 63.15 per cent.

In contribution terms, financial and insurance activities remained the largest single source of CIT, accounting for 24.73 per cent of collections.

Mining and quarrying contributed 16.06 per cent, and manufacturing 13.82 per cent. At the lower end, activities of households as employers and undifferentiated goods and services-producing activities for own use accounted for 0.01 per cent, extra-territorial organisations and bodies 0.13 per cent, and water supply and related activities 0.38 per cent.

CIT is a key component of Nigeria’s non-oil revenue strategy.

The government implemented a package of tax reforms in 2025 — including the Nigeria Tax Bill and related legislation signed into law in June 2025 and effective January 2026 — intended to modernise tax administration and broaden the revenue base.

In March 2026 the federal government also introduced new presumptive tax rules for micro, small and medium enterprises.

Analysts say the sharp year-on-year decline in CIT collections points to persistent pressure on corporate profitability and the need for sustained efforts to broaden the tax base and improve compliance, particularly among domestic firms.