Eight of Nigeria’s largest listed consumer goods companies paid a combined N190.66bn in income tax in the first half of 2026, a 53 per cent jump from the N124.59bn they paid in the corresponding period of 2025, The PUNCH has found.
An analysis of the fast-moving consumer goods companies’ unaudited results showed the rise in tax payments outpaced the sector’s growth in pre-tax profit, which climbed 48.8 per cent over the same period. It pushed the blended effective tax rate for the group from 38.3 per cent in the first half of 2025 to 39.4 per cent in the first half of 2026.
The companies covered are Nestlé Nigeria, NASCON Allied Industries, Nigerian Breweries, Cadbury Nigeria, International Breweries, Dangote Sugar Refinery, Guinness Nigeria and Champion Breweries.
The figures come as companies report their first full half-year under Nigeria’s revised tax regime, which took effect in January 2026.
Best tax outcomes
A ranking of the eight companies by the change in their effective tax rate shows a wide gap between the best and worst performers.
Champion Breweries recorded the most favourable shift, swinging from an effective tax rate of 33.8 per cent in the first half of 2025 to a net tax credit position in the first half of 2026. Dangote Sugar Refinery followed, moving from a loss-making position in the prior year to an effective tax rate of 5.9 per cent this year. Cadbury Nigeria held its rate flat at 30 per cent in both periods, while NASCON Allied Industries and Guinness Nigeria posted modest increases of 1.0 and 3.3 percentage points, respectively.
Nestlé Nigeria, Nigerian Breweries and International Breweries recorded the steepest increases, with International Breweries posting the worst outcome in the sector; its effective tax rate rose by 15.9 percentage points, from 32.9 per cent to 48.8 per cent.
The two brewers with the sharpest increases in effective tax rate, International Breweries and Nigerian Breweries, also posted the sector’s strongest growth in pre-tax profit, at 21.6 per cent and 18.2 per cent, respectively. For International Breweries, the tax bill grew so much faster than profit that net income fell 7.2 per cent despite the strong pre-tax performance, a rare case of a good operating half being wiped out at the tax line.
Breakdown
Nestlé Nigeria paid N61.99bn in tax in the first half of 2026, up from N37.82bn a year earlier, a rise of 63.9 per cent. Its effective tax rate climbed to 48.9 per cent from 42.8 per cent, the second-highest in the sector after International Breweries. The company’s revenue grew 12 per cent and pre-tax profit rose 43.4 per cent, but the higher tax charge limited net profit growth to 28.1 per cent, at N64.78bn.
NASCON Allied Industries was the most stable performer on tax. Its effective tax rate moved only slightly, from 33 per cent to 34 per cent, while its tax expense grew 31.5 per cent, roughly in line with a 27.6 per cent rise in pre-tax profit. Net profit grew 25.7 per cent to N19.60bn.
Nigerian Breweries paid N63.37bn in tax, up 44.6 per cent from N43.83bn, even as pre-tax profit grew by a smaller 18.2 per cent. The mismatch dragged net profit growth down to just 5.1 per cent, at N92.95bn, despite gross profit rising 14.1 per cent.
Cadbury Nigeria’s effective tax rate held flat at 30 per cent in both periods, meaning the company’s 20.3 per cent profit decline in the first half was not a tax-driven story. The company’s tax expense fell to N3.47bn from N4.36bn in step with lower pre-tax profit, pointing instead to rising operating costs as the cause of its earnings decline.
International Breweries posted the sharpest deterioration in the sector. Its tax expense rose 80.2 per cent to N36.47bn, while pre-tax profit rose only 21.6 per cent, pushing its effective tax rate up to 48.8 per cent from 32.9 per cent. As a result, net profit fell 7.2 per cent to N38.31bn even though revenue, gross margin and operating profit all improved during the period.
Dangote Sugar Refinery turned around from a pre-tax loss of N22.11bn in the first half of 2025 to a pre-tax profit of N44.09bn in the first half of 2026. It still paid tax in the loss-making period, at N2.17bn, under Nigeria’s minimum tax rules. Its tax bill grew 19.2 per cent to N2.58bn in the profitable period, giving it the most favourable tax trajectory of any major company reviewed, with an effective tax rate of just 5.9 per cent.
Guinness Nigeria’s tax expense rose 78.1 per cent to N13.03bn, pushing its effective tax rate to 34 per cent from 30.7 per cent. However, strong underlying growth allowed the company to absorb the higher tax bill; pre-tax profit rose 60.9 per cent and net profit grew 53.3 per cent to N25.30bn, among the sector’s strongest net income growth rates.
Champion Breweries was the outlier. Group pre-tax profit fell 34.1 per cent, from N3.46bn to N2.28bn, but a tax credit of N368.9m, compared with a N1.17bn charge a year earlier, meant net profit still rose 15.6 per cent to N2.65bn. Stripped of the tax credit, the standalone parent company posted a pre-tax loss of N1.31bn for the period.
Analysts react
The Senior Analyst, FMCG, at Cardinalstone Securities, Oluwakemi Abiodun, said the numbers pointed to tax becoming a bigger drag on earnings for some of the larger consumer goods firms.
“The elevated effective tax rates suggest that tax is becoming a more material drag on earnings for some of the larger FMCGs, particularly the ones being reviewed, where ETRs are above 40 per cent, and this would definitely lower the companies’ EPS,” Abiodun said.
She said the sharp rise in tax payments was not solely a function of a higher statutory tax burden: “We don’t think this notable increase is solely due to the increase in the statutory tax burden. Rather, we believe the significant divergence in effective tax rate across the sector suggests that company-specific tax positions, which could include payment of deferred taxes and other tax adjustments or incentives, are increasingly influencing post-tax earnings.”
Abiodun added that higher tax payments would not necessarily translate into lower dividends for shareholders, noting, “In the case of dividends, it’s not one for one, as a company could decide to increase its payout ratio from its norm when ETRs were lower, and this shouldn’t necessarily affect the dividend it pays.”
Notably, the CardinalStone analyst linked part of the increase to the new tax law.
“Yes, the new tax regime is relevant to the elevated ETRs, as in January 2026, the Nigeria Tax Act introduced a four per cent Development Levy on large companies, alongside a 30 per cent corporate income tax rate, creating a headline burden of approximately 34 per cent. Hence, this tax law is a partial indicator of this increase,” Abiodun said.
Similarly, the Investment Research Analyst, Nathanael Disu, linked the elevated tax bills to the new law, but said last year’s low tax base had exaggerated the year-on-year jump.
“The elevated tax expense for FMCG companies is not unrelated to the new tax laws, which have shaped their bottom line,” Disu said.
He said the pace of increase would likely slow going forward. “However, the significant year-on-year jump in the tax expense is largely due to the low base effect from last year. As such, while the effect of the new tax law is the ‘new normal’, we expect the year-on-year change in 2027 to moderate compared to 2026.”