Nigeria’s States Collect N5.15tn in IGR as Workers’ Salaries Become Government’s Favourite ATM

Nigeria’s states and the Federal Capital Territory generated a combined N5.15 trillion in Internally Generated Revenue (IGR) in 2025, representing a 40.93 per cent increase from the N3.65 trillion recorded in 2024, according to the latest National Bureau of Statistics report.

In what may make salary earners stare at their payslips with renewed suspicion, tax revenue contributed N3.79 trillion, representing 73.64 per cent of the total IGR, while revenue from Ministries, Departments and Agencies accounted for N1.36 trillion. PAYE alone contributed N2.64 trillion, making taxes deducted from workers’ earnings the biggest component of state-level tax revenue.

Nigeria’s States Record 40.93% Rise in Internally Generated Revenue

The figures suggest that workers’ salaries played a major role in the revenue story, with PAYE accounting for roughly 69.5 per cent of total tax revenue collected by the states and FCT. Withholding tax followed at N503.46 billion, while other taxes contributed N300.21 billion.

In ordinary Nigerian translation, the government revenue machine appears to have found one reliable place where money regularly enters: the worker’s payslip. The satirical irony is that while workers may celebrate seeing their salaries arrive, the tax system appears to celebrate even faster when its own share is deducted before the money gets comfortable in their bank accounts

N5.15tn IGR: Nigerian States Payslips Suddenly Become VIP Guests

Lagos remained the biggest contributor, generating about N1.77 trillion, or roughly one-third of the combined IGR of the states and FCT. Rivers followed with N428.42 billion, Enugu with N406.77 billion, while the FCT generated N356.34 billion and Ogun N252.36 billion. At the opposite end, Yobe recorded N16.01 billion, Ebonyi N17.18 billion and Sokoto N20.48 billion.

The figures therefore reveal a revenue landscape where some states appear to have discovered turbo mode while others are still looking for the ignition key. Recent analysis also indicates that many states continue to depend substantially on Federation Account allocations, despite the improvement in IGR. One September 2026 analysis found that 26 of 34 states examined generated less IGR than their personnel expenditure in 2025.

The NBS also notes that the figures are compiled from official records and submissions by state revenue authorities and remain subject to reconciliation and updates. So, while the N5.15 trillion headline is impressive, the deeper story is about how sustainably states can generate revenue, how widely that revenue base is distributed and how much of it comes from workers’ incomes.

For now, the N5.15 trillion IGR figure has opened another chapter in Nigeria’s ongoing revenue conversation, with PAYE firmly sitting in the spotlight. Whether states can broaden their revenue bases without putting disproportionate pressure on existing taxpayers will remain an important question to watch. OGM News NG will continue to follow the figures, the policies and the next twist in Nigeria’s revenue saga.