Company Income Tax payments by manufacturers fell by 68.25 per cent year-on-year to N74.48bn in the first quarter of 2026, raising fresh concerns over the productive sector’s capacity to withstand Nigeria’s new tax regime, weak consumer demand and elevated operating costs.

An analysis of the Company Income Tax report released by the National Bureau of Statistics showed that manufacturing CIT dropped by N160.11bn from N234.59bn in Q1 2025 to N74.48bn in Q1 2026.

The decline was also sharp on a quarter-on-quarter basis, as tax payments by manufacturers fell by 47.49 per cent from N141.84bn in Q4 2025, representing a drop of N67.36bn within three months.

The NBS said the data was provided by the Nigeria Revenue Service and reported by the bureau. It stated, “Company Income Tax in Q1 2026 stood at N1.37tn, indicating a decrease of 8.08 per cent on a quarter-on-quarter basis from N1.49tn in Q4 2025.”

The report also showed that total CIT collections fell by 31.05 per cent year-on-year, suggesting that the decline in manufacturing was part of a broader fall in company tax receipts, although the sector’s drop was more severe than the national average.

Despite the steep fall, manufacturing remained one of the three largest contributors to domestic CIT in the quarter. The sector accounted for 13.82 per cent of domestic CIT, behind financial and insurance activities with 24.73 per cent and mining and quarrying with 16.06 per cent.

In value terms, financial and insurance activities paid N133.27bn, mining and quarrying paid N86.55bn, while manufacturing paid N74.48bn. However, when measured against total CIT collections of N1.37tn, including foreign currency payments, manufacturing contributed only about 5.45 per cent.

The report showed that domestic CIT contributed N538.91bn, while foreign CIT payments accounted for N828.82bn, meaning foreign-related company tax payments made up about 60.6 per cent of total CIT collections in Q1 2026.

The fall in manufacturing tax payments may reflect weaker profitability in the sector, as firms continue to face high energy costs, exchange rate pressures, expensive credit, logistics constraints and subdued purchasing power.

The first quarter also coincided with the transition into the new tax framework, which took effect in January 2026, raising questions over whether compliance adjustments, timing of payments or changes in company earnings affected remittances during the period.

The weakness was not limited to manufacturing. The NBS said agriculture, forestry and fishing recorded the steepest quarter-on-quarter decline at 73.52 per cent, followed by construction at 63.15 per cent.

By contrast, water supply, sewerage, waste management and remediation activities recorded the highest quarter-on-quarter growth at 485.71 per cent, followed by activities of households as employers at 197.04 per cent.

The data suggests that while total company tax receipts remain large, the composition is becoming more dependent on financial services, mining and foreign tax payments, while core productive sectors such as manufacturing are contributing less than they did a year earlier.

CIT is a tax levied on the profits made by companies operating in Nigeria. The taxable amount is the company’s profits for the accounting year or period after deducting allowable expenses and applicable reliefs as stipulated under CITA. The new tax acts signed by President Bola Tinubu have brought the CIT down to 25 per cent from 30 per cent.

The current Minister of Finance and Coordinating Minister of the Economy, who was the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, earlier said that the reduction of company income tax to 25 per cent and the introduction of zero per cent CIT for firms with annual turnovers of N100m or less will benefit Small and Medium Enterprises as well as other corporates in the country.