Nigeria’s latest Company Income Tax (CIT) figures have exposed a growing imbalance in the economy, with foreign-linked entities contributing significantly more tax revenue than domestic businesses.
This worry comes at a time when key productive sectors are showing signs of distress.
Data released recently by the National Bureau of Statistics (NBS) showed that total CIT collections stood at ₦1.37 trillion in the first quarter of 2026.
Of the amount, taxes paid in foreign currency accounted for ₦828.82 billion, representing 60.6 per cent of the total, while domestic companies contributed ₦538.91 billion, or 39.4 per cent.
The figures suggest that government revenue is becoming increasingly dependent on foreign-linked businesses and sectors tied to international markets.
While this provides a short-term revenue cushion, analysts warn that it also exposes weaknesses in Nigeria’s domestic corporate sector and raises concerns about the long-term sustainability of economic growth.
The concern is heightened by the broader decline in corporate tax collections.
A review of the NBS data shows that total CIT fell by 31.05 per cent year-on-year and dropped 8.08 per cent from the previous quarter, indicating that corporate profitability remains under pressure across much of the economy.
Tax Base Shifts Away from Production
The Alliance for Economic Research and Ethics said the NBS data points to a deeper structural problem beyond the headline tax figures.
According to the think tank group, Nigeria’s tax base is gradually shifting away from productive sectors such as manufacturing towards finance and extractive industries.
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“Who is actually paying Nigeria’s corporate taxes? Financial and insurance companies lead, contributing 24.73% of total CIT. Mining and quarrying follow at 16.06%. Manufacturing, the sector that employs the most workers, that transforms raw materials into finished goods, that holds the greatest potential for industrialisation, contributes just 13.82%,” the group stated.
Financial and insurance activities accounted for the largest share of CIT at 24.73 per cent, followed by mining and quarrying at 16.06 per cent and manufacturing at 13.82 per cent.
Together, the three sectors generated more than 54 per cent of all company income tax collected during the quarter.
For the Alliance, this concentration carries significant risks, it said, “This is the structural warning buried inside the headline number.
“Nigeria’s tax base is shifting away from production and toward extraction and finance. That is the profile of a rentier economy, not an industrialising one.”
The NBS data also showed severe weakness in sectors closely tied to domestic economic activity.
Agriculture, forestry and fishing recorded the sharpest quarterly decline, falling by 73.52 per cent, while construction contracted by 63.15 per cent.
These sectors are major employers and are critical to domestic demand, investment and income generation.
Their poor performance may help explain why domestic tax contributions lagged significantly behind foreign currency-denominated payments.
Manufacturing Collapse Raises Alarm
One of the most troubling findings identified by the Alliance was the sharp decline in manufacturing tax payments.
According to the group, manufacturing CIT fell by 31 per cent year-on-year, from ₦107.9 billion in the first quarter of 2025 to ₦74.48 billion in the same period of 2026.
On a quarter-on-quarter basis, the decline was even steeper at 47.49 per cent, as the Alliance described the trend as a warning signal for the economy.
“Manufacturing tax payments, the lifeblood of the nation’s productive economy, collapsed by 31% year on year. That is not a statistical blip; that is a warning siren,” the group stressed.
It noted that manufacturing tax payments have fallen sharply from about ₦360 billion in the first quarter of 2025 to just ₦74 billion in the first quarter of 2026.
According to the group, the decline suggests that manufacturers are still producing and selling goods, but are struggling to make profits.
“Manufacturing VAT, the tax on goods sold, remained strong at ₦329.59 billion in Q1 2026. Manufacturing CIT, the tax on profits, collapsed to just ₦74.48 billion. Factories are still producing, they are still selling, but their profit margins have been crushed,” it pointed out.
The Alliance warned that the implications extend beyond tax collections, maintaining that weaker manufacturing profitability could lead to slower job creation, reduced investment, higher import dependence and greater pressure on the naira.
It also cautioned that increasing reliance on finance, mining and foreign-linked tax payments could leave government revenue vulnerable to commodity price shocks, exchange-rate volatility and changes in global investment flows.
“This is not an accounting footnote. This is a five-alarm fire,” the group said.
The Pinnacle Daily analysis shows that the NBS data ultimately paint a picture of an economy that remains heavily dependent on a narrow group of sectors for corporate tax revenue as domestic productive industries struggle under mounting pressures, according to the Alliance.
While foreign-linked businesses continue to provide a critical source of revenue, the widening gap between foreign and domestic tax contributions suggests that Nigeria’s long-term challenge lies not in collecting more taxes, but in rebuilding the productive sectors that generate jobs, profits and sustainable economic growth.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X