LAGOS, Rivers and the Federal Capital Territory (FCT) generated the highest amounts of internally generated revenue in 2022.
This is according to the recent Internally Generated Revenue report from the National Bureau of Statistics (NBS) which was released earlier today, October 23, 2023.
According to the National Bureau of Statistics, these are the major highlights of the financial performance of various states in Nigeria during the year:
Top Performers: Lagos, Rivers, and the Federal Capital Territory (FCT) stood out as the leading states in terms of IGR. They raked in impressive amounts of ₦651,145,633,085.30, ₦172,823,232,535.44, and ₦124,366,774,519.25, respectively.
Underperforming States: On the other end of the spectrum, Kebbi, Taraba, and Yobe were the least successful in generating revenue. They managed to collect only ₦9,146,249,907.83, ₦10,238,110,125.95, and ₦10,456,776,796.18, respectively.
Major Revenue Source: The main source of revenue for the year was the pay-as-you-earn (PAYE) tax, contributing a significant 67.62% to the total tax revenues generated across the country.
Minor Revenue Source: Capital gains tax, on the other hand, played a much smaller role, accounting for only 0.24% of the total tax revenue.
Local Government Revenue Leaders: In terms of local government area (LGA) revenue, Oyo, Lagos, and Jigawa emerged as the top three states. They reported impressive figures of ₦11,832,437,020.33, ₦11,505,586,283.35, and ₦8,700,993,591.78, respectively.
The NBS report also noted that in the year 2022, the Internally Generated Revenue (IGR) was primarily driven by two major sources: taxes and revenue from Ministries, Departments, and Agencies (MDAs).
Within the taxes category, there were several sub-categories, including PAYE, Direct Assessment, Road Taxes, Stamp Duties, Capital Gain Tax, Withholding Taxes, Other Taxes, and revenue from Local Government Areas (LGAs).
Collectively, the 36 states of Nigeria and the Federal Capital Territory (FCT) managed to generate a total of ₦1,925,612,626,650.76 as IGR in 2022. This represented a modest growth of 1.57% when compared to the ₦1,895,786,762,263.80 generated in the previous year, 2021.
To put it simply, the revenue for 2022 came from taxes, including various types, and the income generated by different government departments and agencies. The total revenue collected across all states and the FCT increased slightly compared to the previous year.
It is important to note that Pay As You Earn (PAYE) is a specific type of personal income tax in Nigeria. It involves the automatic deduction of taxes directly from the wages and salaries of employees who work in the formal sector.
In other words, if you are employed by a company or organization, your employer is legally obligated to withhold a portion of your income as PAYE taxes.