AfriPulse
June 22 (THEWILL) — Company Income Tax (CIT) payments from Nigeria’s manufacturing sector plunged by 68.25 percent year-on-year in the first quarter of 2026, underscoring the mounting pressures facing producers amid a new tax framework, weak consumer demand and persistently high operating costs.
Data from the National Bureau of Statistics (NBS) showed that manufacturing companies remitted N74.48 billion in CIT during Q1 2026, down from N234.59 billion recorded in the corresponding period of 2025.
The decline represents a loss of N160.11 billion in tax payments within one year.
On a quarterly basis, the sector’s tax remittances also fell sharply by 47.49 percent , from N141.84 billion in Q4 2025 to N74.48 billion in the review period, highlighting the worsening business environment for manufacturers.
According to the NBS, total company income tax collections stood at N1.37 trillion in Q1 2026, representing an 8.08 percent decline from N1.49 trillion recorded in the preceding quarter.
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On a year-on-year basis, overall CIT collections dropped by 31.05 percent, indicating a broader slowdown in corporate profitability and tax contributions across sectors.
Despite the steep decline, manufacturing remained the third-largest contributor to domestic CIT, accounting for 13.82 percent of local tax receipts. Financial and insurance activities led with 24.73 percent, followed by mining and quarrying at 16.06 percent.
In value terms, the financial sector contributed N133.27 billion, mining and quarrying paid N86.55 billion, while manufacturing remitted N74.48 billion.
However, manufacturing’s contribution represented just 5.45 percent of total CIT collections when foreign tax payments were included.
The report showed that domestic CIT contributed N538.91 billion, while foreign company tax payments accounted for N828.82 billion, representing about 60.6 percent of total collections.
Analysts attribute the decline in manufacturing tax ,payments to weaker profitability driven by soaring energy costs, exchange-rate volatility, high borrowing costs, logistics challenges and subdued consumer spending.
The first quarter also marked the implementation of Nigeria’s new tax laws, which reduced the corporate income tax rate from 30 percent to 25 percent, while granting a zero percent rate to businesses with an annual turnover of N100 million or less.
While the reforms are expected to support small businesses over the long term, the latest figures suggest Nigeria’s productive sectors remain under significant strain, with government tax revenues increasingly reliant on financial services, mining activities and foreign-sourced company taxes.
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Source: TheWillNigeria | Read the Full Story…
