By David Akinmola
Nigeria’s company income tax (CIT) collections declined sharply by 49.8 per cent in the fourth quarter of 2025, reflecting weakening corporate earnings and mounting macroeconomic pressures on businesses.
Latest data from the National Bureau of Statistics (NBS) showed that the significant drop marks one of the steepest quarterly contractions in recent years, raising concerns over fiscal stability and revenue sustainability.
Analysts attribute the decline to a combination of factors, including high operating costs, currency volatility, and subdued consumer demand, which have continued to erode corporate profitability across key sectors of the economy.
A tax expert noted that the sharp fall in CIT receipts is a direct reflection of the strain on businesses.
“Company income tax is closely tied to profitability. When firms face rising costs and shrinking margins, tax payments naturally decline. What we are seeing is the impact of macroeconomic headwinds on corporate performance,” the expert said.
The development comes amid persistent inflationary pressures, elevated energy costs and foreign exchange constraints, all of which have significantly increased the cost of doing business in Nigeria.
Industry stakeholders also pointed to the lingering effects of policy adjustments and economic reforms, which, while necessary for long-term stability, have created short-term pressures for many firms.
Despite the quarterly decline, analysts say the performance underscores the need for policies that support business growth, improve productivity and stabilise the operating environment.
“Revenue mobilisation cannot be sustained without a thriving private sector. Supporting businesses through targeted reforms will be critical to reversing this trend,” an economist said.
The drop in CIT collections is expected to impact government revenue projections, particularly at a time when fiscal authorities are seeking to boost non-oil revenues to reduce dependence on crude oil earnings.
Experts therefore emphasise the importance of broadening the tax base, improving compliance and enhancing efficiency in tax administration, rather than relying solely on existing corporate taxpayers.
As Nigeria navigates its economic recovery path, stakeholders maintain that restoring business confidence and profitability will be key to improving tax revenues and strengthening overall fiscal resilience.
