PAYE and MDA collections drive N1.5tn increase as Lagos alone generates more revenue than four other top-performing jurisdictions combined…..
Nigeria’s 36 states and the Federal Capital Territory generated a record N5.15 trillion in internally generated revenue in 2025, marking a 41 per cent increase from the N3.65 trillion collected a year earlier.
The latest figures from the National Bureau of Statistics show that the jurisdictions collectively added about N1.5 trillion to their internally generated revenue within a single year.
But the gains were far from evenly distributed, with Lagos accounting for more than one-third of the total revenue generated across the country.
The South-West state collected N1.77 trillion in IGR during the year, representing roughly 34 per cent of the combined N5.15 trillion.
Rivers followed with N428.4 billion, while Enugu generated N406.8 billion. The Federal Capital Territory recorded N356.3 billion, with Ogun completing the top five at N252.4 billion.
At the other end of the scale, Yobe recorded the lowest IGR at N16 billion. Ebonyi followed with N17.2 billion, while Sokoto and Taraba generated N20.5 billion and N28.2 billion respectively.
Lagos’ performance was particularly striking. Its N1.77 trillion collection exceeded the combined N1.44 trillion generated by Rivers, Enugu, the FCT and Ogun.
PAYE remains the main revenue engine
The biggest contributor to the increase was tax deducted from workers’ earnings.
Pay-as-you-earn, or PAYE, revenue rose to N2.64 trillion in 2025 from N1.88 trillion the previous year, an increase of N757.3 billion, or about 40 per cent.
The figure accounted for 51 per cent of the total N5.15 trillion generated by the states and FCT.
Revenue from ministries, departments and agencies was the second-largest source, climbing from N968.16 billion in 2024 to N1.36 trillion in 2025.
Together, PAYE and MDA collections accounted for about 78 per cent of the total IGR recorded during the year and made up the bulk of the N1.5 trillion increase between 2024 and 2025.
Other revenue streams also recorded growth.
Withholding tax increased from N391.6 billion to N503.5 billion, while direct assessment rose from N87.1 billion to N112.6 billion.
Collections classified as other taxes grew from N201.6 billion to N300.2 billion, while revenue generated by local government areas increased from N39.4 billion to N65.8 billion.
Stamp duties, road taxes post triple-digit growth
Some of the smaller revenue categories recorded the fastest percentage increases during the year.
Stamp duty receipts more than doubled, rising 112 per cent from N52.6 billion in 2024 to N111.6 billion in 2025.
Road-tax collections followed a similar pattern, increasing 109 per cent from N23.9 billion to N49.9 billion.
Capital gains tax, however, recorded a more modest increase among the major revenue streams highlighted in the data, rising 17 per cent from N10.6 billion to N12.4 billion.
Despite the sharp percentage growth recorded by stamp duties and road taxes, their combined increase amounted to about N84.9 billion — considerably below the N757.3 billion added to PAYE revenue over the same period.
The figures underline the extent to which the overall improvement in states’ internally generated revenue was driven by a relatively small number of major sources.
Lagos widens gap with other states
Lagos’ dominance was evident across the revenue figures, particularly in PAYE collections.
The state generated N993.3 billion from PAYE in 2025, ahead of Rivers with N359.2 billion and the FCT with N320.1 billion.
Lagos’ PAYE collection was also more than three times its N292.6 billion revenue from ministries, departments and agencies.
The composition of revenue was markedly different in some other jurisdictions.
In Enugu, for instance, MDA revenue reached N355.3 billion, dwarfing the N25.3 billion generated through PAYE.
Ogun also recorded higher collections from MDAs than from PAYE, with N141.1 billion and N73.7 billion respectively.
The contrasting figures show that states are relying on significantly different revenue bases, despite the overall rise in internally generated revenue.
Revenue growth concentrated in key sources
The 2025 figures point to a substantial improvement in the ability of states and the FCT to generate revenue internally, but the increase was concentrated largely in PAYE and MDA collections.
PAYE alone contributed more than half of the total IGR, while the combined performance of PAYE and MDAs accounted for nearly four-fifths of all internally generated revenue during the year.
For Lagos, the numbers further reinforce its position as the country’s dominant sub-national revenue generator, with its N1.77 trillion haul exceeding the combined collections of the next four jurisdictions in the ranking.
Overall, the NBS figures show that while several revenue categories expanded significantly in 2025, taxes on workers’ income and collections from government agencies remained the principal drivers of the increase in states’ internally generated revenue.
