Analysis of Tax Collection per State for Nigeria.
When people talk about taxation in Nigeria, the conversation usually stays at the federal level. But the real differences show up at the state level. Across Nigeria’s 36 states and the FCT, tax performance is not evenly spread at all. In reality, only a handful of states are responsible for the majority of internally generated revenue. Most others still rely heavily on monthly allocations from Abuja, in some cases covering between 70 and 90 percent of their budgets. This imbalance is one of the main reasons the IMF keeps pushing for subnational tax reform. The strength of Nigeria’s economy is not just about federal revenue—it depends heavily on whether states can fund themselves.
Lagos and a Few Others Are in a League of Their Own.
At the top of the list is Lagos State, and it is not even close. In 2024, Lagos generated about ₦651 billion in internal revenue, which represents roughly three-quarters of all internally generated revenue across Nigerian states. What makes Lagos different is not just population or size—it is structure. The state has built one of the most advanced subnational tax systems in Africa. Through the Lagos Internal Revenue Service, tax collection is integrated with banks, telecoms, and corporate registries. PAYE compliance in the formal sector is estimated to be as high as 85 percent. Beyond income tax, Lagos also generates significant revenue from property taxes, land use charges, consumption taxes in hospitality, and business operations. Lagos treats taxation as economic survival, not policy choice. That mindset alone separates it from most other states. Rivers State comes next with about ₦226 billion in IGR in 2024. Its advantage comes from its industrial and oil-linked economy. Oil and gas servicing companies, ports, and corporate operations form a strong tax base. The Rivers Internal Revenue Service is known for aggressive enforcement, particularly around withholding tax and company income tax.
