Nigerians pay N1.23tn tax to 36 states

In 2021, Nigerians in 36 federated states paid N1.23 trillion in taxes, a 19.19 percent increase from the N1.03 trillion paid in 2020.Information Guide Nigeria

According to recently released statistics from the National Bureau of Statistics entitled States’ Internally Generated Revenues, this is the case.

Via figures, tax receipts made up 66.16 percent of the state’s IGR (N1.56 trillion) in 2020, and 64.88 percent of N1.89 trillion in 2021.

According to the data, taxes account for a sizeable portion of state revenues. These included Pay As You Earn, direct assessment, road taxes, and other taxes paid by inhabitants of a state.

Lagosians paid N405.08 billion in taxes, whereas the Federal Capital Territory paid N131.93 billion. Others include Rivers (N115.74bn), Delta (N70.78bn), and Ogun (N36.72bn), which, along with Lagos and the FCT, paid the most taxes.

Ekiti (N7.55bn), Kebbi (N7.39bn), Abia (N6.51bn), Yobe (N6.09bn), and Taraba (N4.54bn) paid the lowest levels of taxes.

Despite the fact that tax revenues have increased on an annual basis, states are unable to survive on these revenues and other sources of income alone. They continue to rely primarily on federal funding.

In its ‘State of States (2022 edition)’ report, BudgiT, a data firm, said, “Having been inundated with fiscal shocks from the Covid-19 pandemic in 2020 which plummeted government revenues, the 36 states of the federation commenced a rebound as the cumulative revenues of the states grew by 9.19 per cent from the N4.69tn earned in 2020 to N5.12tn in 2021.

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“Cumulatively, there was a 33.66 per cent year-on-year growth in the aggregated Internally Generated Revenue (IGR) of the 36 states, from N1.2trn in 2020 to N1.61tn in 2021.

“However, the bulk of the states still rely heavily on federally distributed revenues to implement their budgets. While at least 50 per cent of the total revenue of 33 states were federal transfers, 13 states relied on federal transfers for at least 70 per cent of their total revenues.

“Being faced with declining revenues owing to Nigeria’s subsidy regime and the volatile price of crude oil, over-reliance on federal transfers is becoming increasingly unsustainable. Hence states as a matter of urgency need to wean themselves off the dependence on federally distributed revenues by significantly improving their capacity to mobilise revenues internally.”

Akpan Ekpo, a professor of economics and public policy at the University of Uyo, stated in a previous interview that for states to enhance their tax collections, they must prioritise employment-generating initiatives.

He said, “States need to attract investments. When people have jobs, they pay tax. If an individual doesn’t have a job, they cannot pay PAYE tax.

“There is high unemployment in every Nigerian state. If the states increase employment, bring in investors, start companies, foreign direct investment comes in, people will work, and they will pay tax.”

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