The National Bureau of Statistics (NBS) has reported a sharp decline in company income tax (CIT) collections in the first quarter of 2026, reflecting sustained economic pressures on businesses despite ongoing reforms.
Q1 2026 CIT Collections Drop
According to the NBS, CIT collections stood at ₦1.37 trillion in Q1 2026, an 8.08% decrease from the ₦1.49 trillion recorded in Q4 2025. On a year-on-year basis, the drop was steeper at 31.05%, down from ₦1.98 trillion in Q1 2025. These figures highlight the deteriorating earnings performance of companies in Africa's largest economy.
Foreign vs Domestic Contributions
Foreign CIT payments accounted for ₦828.82 billion or 60.5% of total revenue, while domestic CIT contributed ₦538.91 billion (39.3%). This indicates that multinational firms remain key contributors, even as local businesses face headwinds.
Economic Challenges Persist
The decline comes despite government assurances that fiscal reforms would improve the business environment. Businesses continue to grapple with high inflation, foreign exchange volatility, elevated borrowing costs, and rising operational expenses following fuel subsidy removal and exchange-rate liberalization.
Many firms report shrinking profit margins as costs outpace consumer purchasing power. The CIT figures contrast with the Federal Government's ambitious revenue projections in the 2026 budget, which relies heavily on non-oil tax revenue.
Sectoral Contributions
The financial services, mining, and manufacturing sectors remained strong contributors to tax collections, cushioning a steeper decline. The NBS noted that CIT is a key non-oil revenue source, and future quarters will be closely monitored to assess whether reforms translate into stronger corporate profitability and tax collections.
