In 2023, the NBS reported that the combined Internally Generated Revenue (IGR) from the 36 states and the Federal Capital Territory (FCT) reached an impressive total of N2.43 trillion. This figure marks an increase of 26.03 percent from the N1.93 trillion recorded in 2022,
Among the states, Lagos stands out as the highest contributor to IGR, generating N N815.86 billion, It is closely followed by the Federal Capital Territory (FCT), which recorded a revenue of N211.10 billion, and Rivers State, which brought in N195.41 billion. This trio of states demonstrates the economic strength of Nigeria’s largest urban areas, which continue to attract business and investment opportunities.
On the other end, Taraba, Yobe, and Kebbi states reported the lowest revenues, generating N10.87 billion, N11.19 billion, and N11.74 billion, respectively.
A closer look at the types of taxes reveals that Pay-As-You-Earn (PAYE) tax was the largest contributor to tax revenue, amounting to N1.24 trillion, which represented 63.83 percent of the total taxes collected. Conversely, capital gains tax was the least, bringing in N5.91 billion.
Overall, total tax revenues accounted for around 80 percent of the national IGR. This indicates a strong reliance on taxation as a primary financial resource for state governments, emphasizing the critical role taxes play in funding public services and infrastructure development across the country.
As the states continue to explore ways to enhance their IGR, a focus on efficient tax collection and broadening the tax base could yield substantial benefits in the years to come.
Engineer, Entrepreneur, forex trader and Analyst
