Ten States in Nigeria, Foreign Investors abandoned 27
States, as Lagos and Abuja attracted $5.8 billion, tax revenue
The latest Internally Generated Revenue (IGR) report
released by the National Bureau of Statistics showed that ten (10) states in
Nigeria received a total sum of N430.07 billion from tax revenue in half of
2019.
According to the Bureau’s report, the top 10 states in
Nigeria generated 72% of the total tax revenue. Basically, the states include
Lagos, Rivers FCT, Delta, Akwa Ibom, Kaduna, Ondo, Ogun, Cross River and Kano.
The Breakdown: Basically, in half-year 2019, all the 36
states in Nigeria (plus FCT) generated a total sum of N596 billion tax revenue,
down from the N579.5 billion recorded in half-year 2018. This means tax revenue
for states rose by 29% between half-year 2018 and 2019. Basically, taxes
collected by the states include Pay As You Earn (PAYE), Direct Assessment, Road
Taxes and other taxes.
Specifically, PAYE accounted for 72.4% or N432.2 billion of
the total tax revenue generated across states. Also, the sum of N121 billion
(24%) was generated from other taxes, N25.4 billion was generated from direct
assessment and road tax (N14.5 billion or 2.4%).
In half-year 2019 (January – June 2019), Nigeria’s
commercial city, Lagos, tops with a total N187.8 billion tax revenue. Rivers
follows with tax revenue generated amounting to N72.4 billion, while FCT ranks
third with tax revenue of N38.5 billion.
Meanwhile, 10 states with the lowest tax revenue generated
within the period include Nasarawa (N4.4 billion), Ebonyi (N4.3 billion),
Jigawa (N4.2 billion), Kebbi (N4.1 billion), Adamawa (N4.1 billion) and Anambra
(N3.4 billion). Others are Borno (N2.8 billion), Taraba (N1.9 billion), Gombe
(N1.7 billion) and Yobe (N1.4 billion).
Essentially, PAYE is a form of personal income tax that
refers to tax deducted directly from the wages and salaries of employees
operating in the formal sector.
All employers in Nigeria are responsible for deducting PAYE
taxes from their employees’ earnings. While road taxes are daily levies paid by
commercial transporters operating within the states, direct assessment may
relate to a form of personal income tax used to assess tax for self-employed
individuals.
Meanwhile, other taxes include various taxes Such as levies
on market traders, land registration and other land-related fees, development
levies on individuals, pool betting/lottery/gaming fees, stamp duties on
individuals, etc.
What this means: As low revenue generation concerns grow
across states in Nigeria, the top 10 states may be regarded as the country’s
major commercial cities.
For instance, in an earlier report published on
Nairametrics, it was reported that Lagos State generated the biggest Internally
Generated Revenue of N205.16 billion in half-year and this constituted 30% of
the IGR generated across states. Also, Rivers and FCT rank top behind Lagos.
It should be noted that following the recent financial
downturn recently witnessed in the economy, most states have been directed by
the Federal Government to improve their tax net in order to ease off the
dwindling oil revenue.
Despite the rise in tax revenue, 14 states earned only
between N1 billion and N4 billion as tax revenue and this is worrisome.
