Company Income Tax (CIT) payments by Nigerian manufacturers plunged by 68.25 per cent in the first quarter of 2026, highlighting mounting pressure on the sector amid new tax reforms, weak consumer demand and rising operating Costs.
An analysis of the latest Company Income Tax report released by the National Bureau of Statistics (NBS) showed that manufacturing sector tax payments dropped from N234.59bn in Q1 2025 to N74.48bn in Q1 2026, representing a decline of N160.11bn within one year.
The downturn was equally significant on a quarter-on-quarter basis, with manufacturers remitting N74.48bn in Q1 2026 compared to N141.84bn in Q4 2025, a decrease of 47.49 per cent or N67.36bn in just three months.
According to the NBS, total Company Income Tax collections stood at N1.37tn during the quarter, representing an 8.08 per cent decline from N1.49tn recorded in the previous quarter. Year-on-year, overall CIT collections also fell by 31.05 per cent, indicating a broader slowdown in corporate tax contributions across the economy.
Despite the sharp decline, manufacturing remained one of the three largest contributors to domestic CIT, accounting for 13.82 per cent of local tax collections. The sector ranked behind financial and insurance activities, which contributed 24.73 per cent, and mining and quarrying, which accounted for 16.06 per cent.
In value terms, financial and insurance firms paid N133.27bn, mining and quarrying contributed N86.55bn, while manufacturers remitted N74.48bn. However, manufacturing accounted for only 5.45 per cent of the total N1.37tn CIT generated during the quarter.
The report further revealed that domestic CIT contributed N538.91bn, while foreign company tax payments accounted for N828.82bn, representing about 60.6 per cent of total collections.
Industry analysts say the sharp fall in manufacturing tax payments may reflect weaker profitability as businesses continue to grapple with high energy costs, foreign exchange volatility, expensive credit facilities, logistics challenges and declining consumer purchasing power.
The first quarter of 2026 also marked the implementation of Nigeria’s new tax framework, raising questions about whether compliance adjustments, payment timing or changes in company earnings affected tax remittances.
The weakness extended beyond manufacturing. Agriculture, forestry and fishing recorded the steepest quarter-on-quarter decline of 73.52 per cent, followed by construction, which dropped by 63.15 per cent.
Conversely, water supply, sewerage, waste management and remediation activities posted the strongest growth at 485.71 per cent, while activities of households as employers grew by 197.04 per cent.
The figures suggest that Nigeria’s company tax revenue is becoming increasingly dependent on financial services, mining activities and foreign tax payments, while key productive sectors such as manufacturing are contributing less than they did a year earlier.
Company Income Tax is levied on profits earned by companies operating in Nigeria after allowable deductions and reliefs. Under the new tax laws signed by President Bola Tinubu, the CIT rate was reduced from 30 per cent to 25 per cent.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, had previously stated that the tax reforms, including the reduced CIT rate and a zero per cent tax rate for companies with annual turnovers of N100m or less, are designed to support small and medium-sized enterprises and encourage business growth.
