Corporate Tax Revenue Hits N4.76trn, Up 38% on Strong Local Contributions — NBS

Nigeria generated N4.76 trillion from company income tax (CIT) in the first half of 2025, marking one of the strongest mid-year revenue performances in recent years, according to fresh figures released by the National Bureau of Statistics (NBS). The bureau said the six-month total represents a 38 percent increase over the N3.45 trillion collected in the corresponding period of 2024, with domestic companies driving much of the growth as government efforts to widen the tax net and enforce compliance begin to show results.

The data revealed a steady build-up in CIT receipts across the two quarters of the year. Revenues climbed from N1.98 trillion in the first quarter to N2.78 trillion in the second quarter, underscoring improved profitability among Nigerian firms and stronger enforcement by tax authorities. When compared with the N2.47 trillion recorded in Q2 2024, the second-quarter performance reflects a 13 percent year-on-year rise. CIT, one of the federal government’s key non-oil revenue streams, is charged on the profits of both domestic and foreign companies operating in the country.

A deeper breakdown of the figures shows that local companies contributed most of the momentum. Their tax payments surged from N646.51 billion in the first quarter to N2.31 trillion in Q2, representing a quarter-on-quarter increase of more than 250 percent. Year-on-year, the leap is even more pronounced, rising 71 percent from N1.34 trillion in the second quarter of 2024. NBS report suggests that improved corporate earnings, firmer regulatory oversight, and better tax reporting systems have strengthened government revenue from the domestic business landscape.

Foreign companies, however, recorded a significant decline in their CIT contribution. Their payments fell sharply by 64.9 percent quarter-on-quarter, dropping from N1.34 trillion in Q1 to N469.36 billion in Q2. On an annual basis, this category also contracted by 58 percent compared to the N1.12 trillion remitted in Q2 2024. Analysts say the drop may reflect weaker foreign corporate activity amid currency volatility, higher operating costs, and the exit or downsizing of some multinational firms.

Sectoral data for Q2 shows the financial and insurance industry dominating the tax chart with N1.02 trillion in CIT, accounting for 44 percent of all local company income tax paid during the quarter. The figure represents a 166 percent jump from the N383.57 billion generated in the same period last year, buoyed by banking recapitalisation programmes, foreign exchange gains, and elevated interest rates that expanded sector earnings.

Manufacturing was the second-largest contributor with N360.20 billion, up 62 percent from N221.97 billion recorded in Q2 2024, reflecting improved production cycles despite high energy costs and supply-chain pressures. The mining and quarrying sector placed third with N212.27 billion, posting a year-on-year growth rate of 24 percent as investments in solid minerals continued to show gradual returns.

Analysis:

Nigeria’s sharp rise in company income tax collections highlights both the resilience of local businesses and the government’s intensified push for revenue, but it also exposes deep structural tensions within the economy. While the surge suggests improved profitability among domestic firms and more assertive tax enforcement, the steep decline in foreign companies’ contributions signals a business environment still burdened by currency instability, policy uncertainty and high operating costs that weaken investor confidence. The revenue growth offers the government a rare fiscal breathing space, yet without corresponding investments in infrastructure, regulatory reforms and economic stability, the gains may prove temporary. Ultimately, the data underscores a dual reality: local firms are adapting under pressure, but Nigeria must address systemic challenges to avoid a widening gap between domestic resilience and foreign retreat.