Power and Gas Sector Remits ₦62.12 Billion in 2025

Nigeria’s electricity, gas, steam, and air conditioning supply sector contributed a total of ₦62.12 billion in Company Income Tax (CIT) in 2025, according to the latest data from the National Bureau of Statistics (NBS).

While the sector remains a foundational pillar of the Nigerian economy, the figure represents a decline from the ₦77.97 billion recorded in 2024. This year-on-year contraction highlights the operational and macroeconomic pressures currently weighing on companies within the energy value chain.

Quarterly Performance and Fluctuations

A closer look at the 2025 fiscal year shows significant volatility in tax remittances, reflecting the shifting challenges faced by operators:

• Q1: Started with a modest ₦10.13 billion.

• Q2: Saw a sharp surge to ₦24.68 billion, the peak performance for the year.

• Q3: Dropped to ₦15.47 billion.

• Q4: Further declined to ₦11.84 billion.

This downward trend in the latter half of the year aligned with a broader contraction in Nigeria’s total CIT collections, which fell by nearly 50% between Q3 and Q4 2025. Despite this quarterly dip, the overall national tax base showed resilience, with total CIT recording a 13.38% year-on-year increase compared to the end of 2024.

The Challenges Behind the Numbers

The decline in tax contributions from the energy supply segment is largely attributed to systemic hurdles that continue to impact profitability:

• Liquidity Strains: Ongoing financial gaps within the power market affect the ability of DisCos and GenCos to maintain high profit margins.

• Rising Operational Costs: Infrastructure limitations and the high cost of maintenance in a volatile inflationary environment have tightened corporate pockets.

• Macroeconomic Pressures: Shifting exchange rates and global energy price volatility have forced many operators to prioritize reinvestment and debt servicing over taxable dividends.

Fiscal Reforms: A New Horizon?

While 2025 saw a contraction in energy-related tax revenue, the Federal Government is betting on a “Strategic Reset” through legislative action. In June 2025, President Bola Ahmed Tinubu signed four major tax reform bills into law:

1. The Nigeria Tax Bill

2. The Nigeria Tax Administration Bill

3. The Nigeria Revenue Service (Establishment) Bill

4. The Joint Revenue Board (Establishment) Bill

These reforms are designed to modernize tax administration, curb evasion, and simplify the compliance process for corporate entities. For the power and gas sector, the hope is that improved transparency and a more efficient tax framework will eventually lead to a more stable environment for both investment and revenue generation.