Introduction
In 2022, the economic landscape of Nigeria witnessed significant shifts in revenue generation, particularly in the realm of internally generated revenue (IGR). Lagos, Rivers, and the Federal Capital Territory (FCT) took the lead as the top generators of IGR. This information stems from a recent report released by the National Bureau of Statistics (NBS) on October 23, 2023. Let’s delve deeper into the highlights and nuances of this report.
The Top Performers
In the world of IGR, Lagos, Rivers, and the Federal Capital Territory (FCT) stood out as trailblazers. They managed to accumulate impressive sums of ₦651,145,633,085.30, ₦172,823,232,535.44, and ₦124,366,774,519.25, respectively. These regions displayed a remarkable knack for revenue generation, setting the bar high for others to follow.
States on the Other End of the Spectrum
On the flip side, Kebbi, Taraba, and Yobe found themselves on the lower rungs of revenue generation. Their collections amounted to ₦9,146,249,907.83, ₦10,238,110,125.95, and ₦10,456,776,796.18, respectively. These numbers indicate the challenges these states faced in generating internal revenue in the given period.
The Major Revenue Source: PAYE Tax
A major contributor to the revenue landscape in 2022 was the pay-as-you-earn (PAYE) tax, which made up a significant 67.62% of the total tax revenues generated across the nation. PAYE tax is a specific type of personal income tax in Nigeria, involving the automatic deduction of taxes directly from the wages and salaries of formal sector employees.
Minor Revenue Sources
In contrast, capital gains tax played a relatively smaller role, accounting for only 0.24% of the total tax revenue. This indicates that in 2022, the bulk of the revenue was derived from the income of salaried workers.
Local Government Revenue Leaders
When examining local government area (LGA) revenue, Oyo, Lagos, and Jigawa were the standout states, reporting impressive figures of ₦11,832,437,020.33, ₦11,505,586,283.35, and ₦8,700,993,591.78, respectively. These regions exhibited exceptional performance at the local level.
Diversified Sources of IGR
The NBS report also drew attention to the diversified sources of IGR in 2022. Revenue generation was primarily driven by two key sources: taxes and revenue from Ministries, Departments, and Agencies (MDAs). Under the taxes category, several sub-categories such as PAYE, Direct Assessment, Road Taxes, Stamp Duties, Capital Gain Tax, Withholding Taxes, Other Taxes, and revenue from LGAs played their respective roles.
Overall Growth
In a broader context, 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% compared to the ₦1,895,786,762,263.80 generated in the previous year, 2021.
Conclusion
In 2022, Nigeria’s internally generated revenue landscape was marked by regional disparities, with certain states taking the lead in revenue generation. The PAYE tax, representing a significant share of the income, underscored the importance of the formal sector in contributing to IGR.
It is clear that local governments also played a crucial role in boosting revenue, with Oyo, Lagos, and Jigawa leading the way. As we navigate the complex terrain of revenue generation, it is essential to keep in mind the diversified sources and the significant growth in IGR, which showcases Nigeria’s economic resilience in a dynamic world.
This report serves as a valuable resource for understanding the financial dynamics of Nigeria and the trends in internal revenue generation, highlighting both strengths and areas for improvement.
