The difficult operating environment in the country has pushed down the revenue from company income tax (CIT) by 31.05 per cent in the last one year.

CIT is the tax businesses pay on the profits they make from their operations.

The National Bureau of Statistics (NBS), in its first quarter (Q1) 2026 CIT report showed that revenue from CIT in Q1 2026 plunged to N1.37 trillion, a 31.05 per cent decline from the N1.98 trillion generated in Q1 2025.

On a quarter-on-quarter basis, it also fell by 8.08 per cent from N1.49 trillion in Q4 2025.

The report also shows that the revenue from Value Added Tax (VAT) in the first quarter (Q1) 2026 rose to N2.42 trillion, an increase of 17.06 per cent from N2.06 trillion in Q1 2025.

On a quarter-on-quarter basis, it also increased by 9.98 per from N2.20 trillion recorded in Q4 2025.

NBS reports that domestic CIT, contributed N538.91 billion, while foreign CIT payment accounted for N828.82 billion during the quarter.

In terms of sectoral shares, the activities with the largest shares in Q1 2026 were Financial and insurance activities with 24.73 per cent; mining and quarrying with 16.06 per cent while manufacturing trailed with 13.82 per cent.

It would be recalled that revenue from CIT has been fluctuating in recent times owing to the harsh economic environment that has seen businesses either scale down their operations, relocate from the country or shut down completely.

In Q4 2025, CIT revenue stood at N1.49 trillion, representing a decrease of 49.81 per cent on a quarter-on-quarter basis from N2.96 trillion in Q3 2025.

Although CIT recorded a positive growth in Q3 2025 with a marginal growth of 6.55 per cent, hitting N2.96 trillion above the N2.78 trillion received in Q2 2025, the growth was driven by foreign payments which contributed N1.75 trillion while domestic CIT was N1.21 trillion.

Meanwhile, the National Bureau of Statistics (NBS), reports that of the total VAT collected, local payments stood at N1.11 trillion, foreign VAT payments were N830.47 billion, while import VAT contributed N477.55 billion during the quarter.

The report shows that in terms of sectoral shares, the activities with the largest shares in Q1 2026 were manufacturing with 29.75 per cent; information and communication with 20.61 per cent; and mining and quarrying with 12.32 per cent.

VAT collections have become a major component of federation revenue. Reports show that VAT allocations shared by the federal, states and local governments rose sharply in 2025, climbing to N7.73 trillion from N6.11 trillion in 2024, a 26.46 per cent year-on-year increase.

According to data from the Federation Account Allocation Committee (FAAC), VAT receipts expanded at the same pace across the three tiers of government. Of the total distributed in 2025, the Federal Government received about N1.16 trillion, states shared roughly N3.77 trillion, while local government areas (LGAs) took home about N710 billion.

Analysts however, say the jump innVAT revenue only reflects higher prices occasioned by inflation and improved tax collection rather than a broad-based surge in economic activities.