The 36 states and the Federal Capital Territory (FCT) generated N5.15 trillion in internally generated revenue (IGR) in 2025, with taxes deducted from workers’ salaries accounting for the largest share of tax revenue, according to the National Bureau of Statistics (NBS).
The latest Internally Generated Revenue at State Level report, published on Thursday, showed that total IGR increased by 40.93 per cent from N3.65 trillion recorded in 2024.
This represents an increase of about N1.50 trillion in revenue generated by the subnational governments within one year.
“The 36 states and the FCT generated a total of N5.15 trillion in 2025, indicating a growth rate of 40.93 per cent from N3.65 trillion recorded in 2024,” the NBS said.
The report showed that tax revenue accounted for N3.79 trillion, representing 73.64 per cent of total IGR, while revenue generated administratively by ministries, departments and agencies (MDAs) stood at N1.36 trillion, or 26.36 per cent.
Pay As You Earn (PAYE) tax was the dominant source of tax revenue, generating N2.64 trillion. The figure represented 69.51 per cent of total tax revenue and approximately 51.3 per cent of the N5.15 trillion generated by the states and FCT.
The NBS said PAYE was the largest tax revenue recorded during the period, while capital gains tax accounted for the smallest share.
“PAYE was the most tax revenue recorded during the period, valued at N2.64 trillion, representing 69.51 per cent of the total tax revenue collected, while capital gains tax was the least with N12.40 billion,” the bureau said.
The NBS defines PAYE as personal income tax deducted directly from the wages and salaries of employees in the formal sector, with employers responsible for deducting the taxes from workers’ earnings.
Other sources captured in the report included direct assessment, road taxes, stamp duties, capital gains tax, withholding taxes, other taxes and local government revenue.
The report also highlighted significant differences in revenue generation among the states.
Lagos recorded the highest IGR at N1.77 trillion, accounting for about 34 per cent of the combined revenue generated by the states and FCT.
Rivers ranked second with N428.42 billion, while Enugu came third with N406.77 billion.
“Lagos, Rivers, and Enugu states recorded the highest IGR with N1.77tn, N428.42bn and N406.77bn, respectively over the reference period,” the NBS said.
The composition of revenue varied considerably among the top-performing states.
Lagos generated N1.48 trillion from taxes and N292.64 billion from MDAs, while Rivers recorded N414.38 billion in tax revenue and N14.03 billion from MDAs.
Enugu recorded a different pattern, generating N51.52 billion from taxes compared with N355.25 billion from MDAs.
The FCT generated N356.34 billion, followed by Ogun with N252.36 billion and Delta with N202.49 billion.
Edo recorded N132.21 billion, while Oyo, Kano and Akwa Ibom generated N103.25 billion, N102.26 billion and N100.80 billion, respectively.
At the lower end of the revenue table, Yobe recorded the lowest IGR at N16.01 billion, followed by Ebonyi with N17.18 billion and Sokoto with N20.48 billion.
The figures indicate a substantial disparity in revenue-generating capacity, with Lagos recording more than 110 times Yobe’s IGR during the year.
Taraba generated N28.16 billion, Benue N29.57 billion, Zamfara N30.07 billion and Kebbi N31.23 billion.
The NBS attributed the differences to variations in taxable economic activity and the revenue-generating capacity of the states.
The bureau said the IGR figures were compiled by the Joint Revenue Board from official records and submissions by State Boards of Internal Revenue.
It added that the figures remained subject to reconciliation and updates by the respective subnational revenue authorities.
