Company Income Tax (CIT) payments from Nigeria’s manufacturing sector declined by 68.25 per cent year-on-year to N74.48 billion in the first quarter of 2026, raising concerns about the sector’s ability to cope with rising operating costs, weak consumer demand and the country’s new tax regime.
Data from the National Bureau of Statistics (NBS) showed that manufacturers paid N234.59 billion in CIT in the first quarter of 2025, compared to N74.48 billion in the corresponding period of 2026, representing a decline of N160.11 billion. On a quarter-on-quarter basis, tax payments also fell by 47.49 per cent from N141.84 billion recorded in the fourth quarter of 2025.
According to the NBS, total company income tax collections stood at N1.37 trillion in Q1 2026, representing an 8.08 per cent decline from N1.49 trillion in the previous quarter. Overall CIT collections also dropped by 31.05 per cent year-on-year, suggesting that the manufacturing sector’s decline was part of a broader reduction in company tax receipts.
Despite the sharp fall, manufacturing remained one of the three largest contributors to domestic CIT, accounting for 13.82 per cent of local tax collections during the period. Financial and insurance activities led with 24.73 per cent, followed by mining and quarrying with 16.06 per cent. In value terms, financial services paid N133.27 billion, mining and quarrying contributed N86.55 billion, while manufacturers remitted N74.48 billion.
The report showed that domestic CIT amounted to N538.91 billion, while foreign company tax payments accounted for N828.82 billion, representing about 60.6 per cent of total collections. Analysts believe the decline in manufacturing tax payments may reflect weaker profitability as firms continue to grapple with high energy costs, exchange rate pressures, expensive borrowing, logistics challenges and declining consumer purchasing power.
The first quarter also coincided with the implementation of Nigeria’s new tax framework, which took effect in January 2026. Observers say compliance adjustments, payment timing and changes in company earnings may have contributed to the reduced remittances.
Although the new tax laws reduced Company Income Tax from 30 per cent to 25 per cent and introduced a zero per cent CIT rate for companies with annual turnovers of N100 million or less, the data suggests that manufacturers are still facing significant challenges. The government had argued that the reforms would ease the tax burden on businesses, especially small and medium-sized enterprises, but the latest figures indicate that many firms remain under pressure.
