The 36 states and the Federal Capital Territory (FCT) generated a total of N5.15tn in Internally Generated Revenue (IGR) in 2025, representing a 40.93 percent increase over the N3.65tn recorded in 2024.
The latest IGR report, compiled by the Joint Revenue Board from official records and submissions by the State Boards of Internal Revenue, showed that Lagos, Rivers and Enugu states recorded the highest revenues during the period.
Lagos State topped the chart with N1.77tn, followed by Rivers State with N428.42bn and Enugu State with N406.77bn.
At the other end of the revenue table, Yobe, Ebonyi and Sokoto states recorded the lowest IGR during the year, with N16.01nn, N17.18bn and N20.48bn respectively.
The report stated that the figures were subject to reconciliation and updates by the respective sub-national revenue authorities.
The IGR comprises two broad categories: tax revenue and revenue generated by Ministries, Departments and Agencies (MDAs) through administrative services.
The tax revenue component includes Pay As You Earn (PAYE), direct assessment, road taxes, stamp duties, capital gains tax, withholding taxes, other taxes and revenue collected by local government areas.
PAYE emerged as the largest source of tax revenue in 2025, generating N2.64tn.
The figure represented 69.51 percent of the total tax revenue collected by the states and FCT during the period.
Capital gains tax recorded the lowest contribution among the specified tax categories, generating N12.4bn.
The report further showed that tax revenue accounted for 73.64 percent of total IGR nationally, highlighting the dominant role of taxation in the revenue profile of the sub-national governments.
Direct assessment, another component of personal income tax, applies particularly to self-employed individuals and businesses, especially those operating in the informal sector.
The report explained that direct assessment allows taxpayers to assess themselves and pay the calculated amount, while state authorities may also impose assessments on businesses based on the scale of their activities.
PAYE, meanwhile, is deducted directly from the wages and salaries of employees in the formal sector, with employers responsible for deducting and remitting the applicable taxes.
Road taxes constitute another source of state revenue and comprise daily levies paid by commercial transport operators operating within the states.
Other taxes include levies on market traders, land registration and other land-related fees, development levies on individuals, pool betting, lottery and gaming fees, as well as stamp duties on individuals.
The significant increase in IGR recorded in 2025 came amid efforts by state governments to strengthen their internally generated revenue systems and reduce dependence on statutory allocations.
The concentration of IGR among a few states was also evident from the figures, with Lagos recording revenue of more than four times that of Rivers, the second-highest revenue-generating state.
Lagos alone accounted for about N1.77tn of the N5.15tn generated by the 36 states and FCT during the year.
Rivers and Enugu followed with N428.42bn and N406.77bn respectively.
The figures also showed a wide disparity in revenue-generating capacity among the states, with the lowest three states Yobe, Ebonyi and Sokoto recording combined IGR of about N53.67bn.
The Joint Revenue Board said the report was based on official records and submissions from the State Boards of Internal Revenue, with revenues appropriately classified and aggregated.
It cautioned that the figures could change following reconciliation and updates by the respective sub-national revenue authorities.