The National Bureau of Statistics (NBS) has reported that the 36 states collected a total of N1.31 trillion as Internally Generated Revenue (IGR) in fiscal year 2020, representing about N200 billion drop from the N1.33 trillion revenue they collected in the preceding year.
The Bureau in its just published report on internally generated revenue (IGR) at state level for Q4 ’20, the states in the quarter under review raked in N335.3 billion compared to the N338.6 billion of the previous quarter.
The data showed that on quarter-on-quarter basis, 14 states and the FCT recorded growth in IGR during the period under review, with Lagos emerging again as the leading state, accounting for 31.8% of total IGR during the quarter.
For the financial year 2020, the highest contributors to aggregate IGR for the 36 states were Lagos state (32.1%), Rivers state (9.0%) and the FCT (7.1%), while each of Yobe, Taraba and Adamawa states generated less than 1% of the states’ total IGR in 2020.
A further breakdown of the states’ IGR by sources indicated that aggregate Pay As You Earn (PAYE) income tax accounted for 62% of total IGR in Q4 ’20 and 65% of total IGR for the whole year.
Among the states with low PAYE revenue were Gombe, Jigawa, Ekiti and Kebbi as each of them achieved less than 1% of total aggregate PAYE revenue.
The underperformance of many states in the PAYE segments, particularly for the states listed above can be attributed to the size of their informal sector which allowed most working indigenes falling outside the tax net.
Available data from the NBS, the low IGR revenue and expenditure profiles of many states may not be unconnected with their overdependence on the monthly allocations to them from the federation account. For instance, the Bureau reported that in 2020, federation account payouts to the states accounted for 64% of their aggregate total revenue.