Nigeria recorded a significant decline in Company Income Tax (CIT) revenue during the first quarter of 2026, according to new figures released by the National Bureau of Statistics (NBS). The drop highlights ongoing challenges facing businesses and raises concerns about corporate profitability across various sectors of the economy.
Data from the NBS showed that the Federal Government generated N1.37 trillion from Company Income Tax between January and March 2026. This represents an 8.08 percent decline compared to the N1.49 trillion collected in the fourth quarter of 2025.
The decline was even more noticeable when compared to the same period in the previous year. On a year-on-year basis, CIT collections fell by 31.05 percent, indicating that many businesses may be facing reduced profits and increased economic pressure.
The report revealed that foreign-owned companies remained the largest contributors to Company Income Tax revenue. These firms paid a total of N828.82 billion, accounting for more than 60 percent of total CIT collections during the quarter.
Meanwhile, Nigerian-owned businesses contributed N538.91 billion, showing that local companies continue to play an important role in government revenue generation, although their contributions remain lower than those of multinational corporations.
Sector-by-sector analysis showed mixed performances across the economy.
The water supply, sewerage, waste management, and remediation sector recorded the strongest growth in tax payments, with CIT collections increasing by an impressive 485.71 percent compared to the previous quarter.
Another notable increase came from household employment and self-use goods and services activities, which recorded a growth of 197.04 percent in tax contributions.
However, some sectors experienced sharp declines. The agriculture, forestry, and fishing sectorrecorded the biggest drop, with tax revenue falling by 73.52 percent. The construction sector also saw a significant decline of 63.15 percent, reflecting slower activity and weaker earnings within the industry.
Despite the overall drop in collections, the financial and insurance sector remained the largest contributor to Company Income Tax revenue. It accounted for 24.73 percent of total CIT collections during the quarter.
The mining and quarrying sector followed with a contribution of 16.06 percent, while the manufacturing sectoraccounted for 13.82 percent.
At the lower end of the scale, household-related activities contributed just 0.01 percent, while extra-territorial organizations and bodies accounted for 0.13 percent. The water supply and waste management sector contributed 0.38 percent despite its strong growth rate.
Company Income Tax remains one of the Federal Government’s key sources of non-oil revenue. To strengthen tax administration and increase revenue generation, the government introduced major tax reforms in 2025. These reforms included the Nigeria Tax Bill and other supporting laws, which came into effect in January 2026 after being signed into law in June 2025.
In addition, the government launched new presumptive tax rules in March 2026 aimed at improving tax collection from micro, small, and medium-sized enterprises (MSMEs).
Economic analysts believe the sharp decline in CIT revenue reflects continued pressure on business profitability. They argue that government efforts should focus on expanding the tax base, improving compliance, and encouraging growth among domestic businesses to ensure more stable revenue generation in the future.
