Nigeria’s Power Sector Contributes N62.12 Billion in Company Income Tax in 2025 Amid Declining Performance
Nigeria’s power sector contributed N62.12 billion in Company Income Tax in 2025, according to the National Bureau of Statistics (NBS). The figure marks a decline from the N77.97 billion recorded in 2024, signaling a slowdown in tax contributions from electricity, gas, steam, and air conditioning supply companies. Analysts say the drop reflects persistent operational pressures and rising costs within the sector.
Quarterly data highlights volatility in the sector’s tax remittances. The NBS reported that the sector paid N10.13 billion in Q1 2025, surged to N24.68 billion in Q2—the highest for the year—but fell to N15.47 billion in Q3 and N11.84 billion in Q4. Overall corporate income tax (CIT) across all sectors also dropped sharply in Q4, from N2.96 trillion in Q3 to N1.49 trillion, although total CIT still posted a 13.38 percent year-on-year increase.
The sector faces ongoing structural and economic challenges. Energy companies continue to battle infrastructure limitations, liquidity issues, and rising operational costs, which affect both profitability and tax remittances. Despite these hurdles, the electricity and gas sector remains vital for industrial activity and national growth, making its performance a key indicator for Nigeria’s economic health.
The broader corporate tax environment mirrors these trends. CIT collections saw growth earlier in 2025, rising 6.55 percent from Q2 to Q3, before a sharp contraction in Q4, likely due to seasonal or economic shocks. The decline in power sector contributions aligns with this overall slowdown, suggesting sector-specific pressures are a key driver of reduced tax performance.
Recent fiscal reforms aim to strengthen revenue generation. In June 2025, President Bola Ahmed Tinubu signed four tax reform bills into law, including the Nigeria Tax Bill and the Nigeria Tax Administration Bill. These measures are designed to enhance tax compliance, improve administration, and expand government revenue, offering hope that sectoral challenges may be offset in the coming years.
source: nairametrics