Company Income Tax (CIT) collections soared to N2.96 trillion in the third quarter of 2025, a remarkable 67 per cent increase from N1.77 trillion recorded in the same period of 2024.

This was disclosed by value-added tax (VAT) and CIT data released by the National Bureau of Statistics (NBS).

The data highlighted a dramatic year-on-year (Y/Y) jump in CIT in last year’s Q3, one of the strongest quarterly performances in recent years.

The surge also underscored significant growth in corporate earnings and stronger compliance in tax remittances across the formal sector.

The steep rise came ahead of the January implementation of the tax reform, which analysts said could significantly increase tax revenue. The government is hoping to leverage the reform to significantly increase the tax revenue.

The country’s tax-to-revenue ratio hovers around 10 per cent compared to the 16 per cent regional average. The current administration is targeting an 18 per cent tax-to-output ratio.

Compared to the first nine months of 2024, CIT recorded a moderate growth last year when it was N7.72 trillion, a 48 per cent Y/Y growth on N5.22 trillion recorded in 2024.

Last year’s three-quarter collection was N1.2 trillion higher than the total CIT value of N6.53 trillion recorded in the entire 2024.

The NBS noted that CIT growth between Q3 2024 and Q3 2025 reflected an improved business environment in key sectors, with companies meeting their tax obligations despite broader macroeconomic pressures.

Alongside the CIT rebound, VAT collections also rose sharply, reaching N2.28 trillion in Q3 2025 from N1.77 trillion in the same quarter of the previous year, the NBS report showed.

VAT grew by 10.66 per cent quarterly from N2.06 trillion recorded in Q2 2025, driven largely by manufacturing, information and communication and mining/quarrying.

A breakdown of the N2.28 trillion generated in Q3 showed that local payments accounted for N1.12 trillion. Foreign VAT payments stood at N680.23 billion, while import VAT contributed N479.79 billion.

Sectoral analysis revealed that manufacturing recorded the largest share of VAT at 25.89 per cent in Q3 2025. Information and communication followed at 18.77 per cent, while mining and quarrying accounted for 14.85 per cent.

Together, the three sectors contributed more than half of the total VAT generated in the quarter.

In terms of growth performance, administrative and support service activities recorded the highest quarter-on-quarter increase at 89.28 per cent. Arts, entertainment and recreation followed with 82.49 per cent growth, while human health and social work activities rose by 32.4 per cent.

However, not all sectors recorded gains. Real estate activities posted the sharpest decline, contracting by 51.33 per cent quarter on quarter.

Activities of households as employers and undifferentiated goods and services producing activities of households for own use fell by 36.22 per cent, while other service activities dropped by 20.3 per cent.

The report noted that activities of households as employers and undifferentiated goods and services producing activities of households for own use recorded the lowest VAT share at 0.003 per cent.

This was followed by activities of extraterritorial organisations and bodies, and water supply, sewerage and waste management, which accounted for 0.03 per cent each.

Overall, the year-on-year comparison shows a striking rebound in both corporate and consumption-based tax revenues, signalling stronger taxable activities and improving compliance across key sectors of the Nigerian economy.