The first quarter (Q1) of 2026 offered the first major test of the Nigeria Tax Act 2025, and the results show a clear pattern across many sectors of the economy, Pinnacle Daily can report.
An analysis of financial statements of banks, insurers, agribusiness firms, cement manufacturers, and telecommunications companies shows that companies paid significantly more in taxes, but the impact on earnings varied widely depending on industry profitability, tax structure, and exposure to the new provisions introduced under the law.
While stronger profitability drove much of the increase in Company Income Tax (CIT), the new Development Levy, minimum effective tax requirements, and other tax changes also contributed to higher tax obligations.
The banking sector emerged as one of the most affected by the new regime, as six of the eight major banking groups analysed recorded higher CIT charges in Q1 of 2026 compared to the same period in 2025.
GTCO posted the sharpest increase, with CIT rising 87.8 per cent to ₦70.05 billion from ₦37.31 billion a year earlier, despite relatively stable profit before tax. Wema Bank followed with a 76.1 per cent increase in CIT to ₦9.43 billion, mirroring a similar rise in profitability. Stanbic IBTC’s tax charge climbed 45.9 per cent to ₦50.11 billion, while Access Holdings recorded a 22.6 per cent increase to ₦49.07 billion.
Ecobank Transnational Incorporated’s tax bill rose 5.4 per cent to ₦105.24 billion, reflecting its multinational operations and exposure to the new minimum effective tax provisions, while Zenith Bank also reported a moderate increase of 9 per cent.
Only Fidelity Bank and United Bank for Africa (UBA) reported lower CIT expenses, reflecting declines in their profit before tax.
Pinnacle Daily reports that the new tax law introduced a four per cent Development Levy on assessable profit and a 15 per cent minimum effective tax rate for large companies and multinational groups. Several banks also made provisions for the retrospective windfall tax on foreign exchange gains.
These measures increased tax expenses even for institutions whose underlying business growth remained relatively stable. GTCO’s current tax expense surged by 63.3 per cent, Access Holdings’ tax obligations increased by 39.1 per cent, while Stanbic and Wema recorded significant jumps in tax payments.
In agriculture and agribusiness, the picture was mixed.
Okomu Oil Palm’s CIT remained largely unchanged at ₦9.84 billion compared to ₦9.81 billion in Q1 2025. Its profit before tax increased modestly by 5.9 per cent, allowing profit after tax to rise 8.6 per cent as tax expenses remained stable.
Presco experienced a much sharper increase, as current income tax nearly doubled to ₦17.79 billion from ₦9.37 billion, while total tax expense rose by about 81 per cent to ₦19.99 billion.
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The spike in taxation significantly reduced the benefits of higher earnings. Although Presco’s profit before tax rose 18.1 per cent, profit after tax increased by only 3.5 per cent, indicating that the heavier tax burden absorbed a substantial portion of the company’s earnings growth.
The insurance sector presented a different story, as aggregate CIT for the insurance firms reviewed declined slightly by 2.1 per cent to approximately ₦1.66 billion from ₦1.69 billion in Q1 2025.
AIICO Insurance recorded a 25.6 per cent increase in CIT to ₦627.5 million as profitability improved. However, Coronation Insurance, Sovereign Trust Insurance, and International Energy Insurance all reported significant declines in tax charges following weaker earnings.
AXA Mansard’s tax position shifted dramatically from a tax credit in Q1 2025 to a tax charge in Q1 2026, resulting in a 168.5 per cent increase in CIT. The company also reported the impact of the new Development Levy introduced under the tax framework.
Unlike the banking sector, where higher taxes were widespread, the insurance industry’s overall tax burden remained relatively stable because weaker profitability among several firms offset increases elsewhere.
Among cement manufacturers, the impact of the new tax regime was evident in the introduction of the Development Levy and higher current tax obligations.
BUA Cement recorded one of the most dramatic changes. Its current company tax jumped to ₦31.98 billion from zero in Q1 2025 as profit before tax nearly doubled to ₦192.68 billion. However, a deferred tax credit helped reduce total tax expense, which actually fell slightly to ₦16.31 billion.
Lafarge Africa’s company income tax increased sharply to ₦46.20 billion from ₦24.29 billion, while total tax expense more than doubled to ₦51.17 billion. The company also recorded a Development Levy of ₦6.37 billion, a charge absent in the corresponding period of 2025.
Dangote Cement stood out as the exception, despite a 35 per cent increase in profit before tax to ₦421.17 billion; total income tax expense declined slightly to ₦100.07 billion from ₦102.73 billion. The reduction suggests that tax credits and management estimates of annual tax obligations helped offset the effects of the new tax measures.
However, all three cement producers posted strong profit growth, indicating that robust operational performance outweighed the impact of higher taxation.
The telecommunications sector recorded perhaps the most dramatic increase in tax obligations, as MTN’s current CIT surged by 841 per cent to ₦199.68 billion from ₦21.23 billion in Q1 2025. Total tax expense rose by 176.8 per cent to ₦190.92 billion.
The increase was largely driven by a 169.6 per cent rise in profit before tax, which climbed to ₦546.42 billion. The company also recorded a new Development Levy of ₦29.65 billion, replacing the tertiary education tax previously paid.
However, the company was not affected by the Act’s new minimum effective tax requirement because its effective tax rate stood at 34.94 per cent, well above the 15 per cent threshold.
The Q1 2026 results suggest that the Nigeria Tax Act 2025 has increased the tax burden across much of corporate Nigeria, particularly through the introduction of the Development Levy and minimum effective tax provisions. However, the extent to which these higher taxes affected earnings depended largely on the strength of underlying business performance.
For banks, agribusiness firms such as Presco, and the telecommunications sector, higher tax obligations absorbed a larger share of profits. In contrast, cement manufacturers largely offset the impact through strong revenue growth and tax credits, while the insurance sector experienced a relatively muted effect due to weaker profitability across several firms.
The early evidence from the first quarter indicates that while the new tax framework has succeeded in raising corporate tax collections, its effect on earnings has been uneven, creating clear winners and losers across sectors of the economy.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X