Company Income Tax Fell 49.8% in 2025
According to the National Bureau of Statistics (NBS), Company Income Tax (CIT) collections stood at ₦1.49 trillion in Q4 2025, reflecting a significant quarter-on-quarter decline of 49.81 percent from ₦2.96 trillion recorded in Q3 2025. Domestic CIT accounted for ₦819.83 billion, while foreign CIT contributed ₦668.21 billion in the quarter under review. Despite the quarterly drop, collections grew by 13.38 percent year-on-year, indicating some underlying resilience.
Sectoral performance was mixed, with activities of extraterritorial organisations and bodies, education, and real estate activities recording the strongest growth, while accommodation and food service activities, activities of households as employers, and mining experienced sharp contractions. Financial and insurance activities, manufacturing, and mining and quarrying remained the least contributors to CIT.
The sharp quarter-on-quarter decline suggests fluctuations in corporate earnings and possible timing effects in tax remittances, particularly from key sectors such as mining and manufacturing. The divergence between strong year-on-year growth and weak quarter-on-quarter performance indicates that while overall economic activity may be improving, it remains uneven and susceptible to sector-specific shocks. The concentration of tax contributions in a few sectors also highlights structural imbalances in the tax base.
Policy efforts should focus on broadening the Corporate Income Tax (CIT) base by enhancing compliance across underperforming sectors and reducing reliance on a narrow set of industries. Strengthening tax administration, improving transparency in remittance processes, and supporting sectoral diversification, particularly in non-extractive industries, is critical. Furthermore, stabilising the macroeconomic environment to support business profitability can help ensure more consistent and sustainable tax revenues over time. Most business activities in Nigeria are also largely informal; hence, they are difficult to tax. Thus, efforts should be geared towards the formalisation of businesses to enable their inclusion into the tax net, but such measures will be more effective if these businesses are able to hold the government accountable.
