Business
States generates ₦112.65bn from self-employed Nigerians in 2025 — NBS
The 36 states of Nigeria and the Federal Capital Territory generated ₦112.65 billion in direct assessment taxes from self-employed individuals and other taxpayers outside the conventional Pay-As-You-Earn system in 2025, according to data from the National Bureau of Statistics.
The figure represents a 29.4 per cent increase from the ₦87.05 billion recorded in 2024, translating to an additional ₦25.59 billion in revenue within one year.
Direct assessment is a form of personal income tax generally applied to individuals whose earnings are not deducted and remitted by an employer under the PAYE system. It covers categories such as traders, professionals in private practice, contractors, farmers operating commercially and other self-employed taxpayers.
The latest figures form part of the 2025 Internally Generated Revenue data for Nigeria’s 36 states and the FCT, released by the Joint Revenue Board and based on data from the National Bureau of Statistics.
The increase in direct assessment revenue comes amid efforts by state governments and revenue authorities to expand the tax base and improve the identification and collection of personal income taxes from individuals outside the formal payroll system.
Lagos accounted for the largest share of the direct assessment revenue collected during the year, according to the analysis of the NBS data.
Overall, the 36 states and the FCT generated ₦5.15 trillion in internally generated revenue in 2025. Tax revenue accounted for about ₦3.79 trillion, while revenue generated by Ministries, Departments and Agencies contributed approximately ₦1.36 trillion.
Pay-As-You-Earn remained the largest tax category, generating ₦2.64 trillion, while withholding tax contributed ₦503.46 billion. Other taxes generated ₦300.21 billion.
Beyond direct assessment, the states and the FCT collected ₦111.57 billion from stamp duties, ₦49.88 billion from road taxes and ₦12.40 billion from capital gains tax in 2025.
The growth in direct assessment revenue reflects the increasing contribution of taxpayers whose earnings fall outside the conventional employer-based PAYE structure. However, the rise also highlights the importance of effective taxpayer registration, income assessment and compliance mechanisms as governments seek to broaden their internally generated revenue.
The Joint Revenue Board said its release of the 2025 sub-national IGR dataset was intended to provide a consolidated reference for assessing revenue performance across the states and the FCT and for tracking the impact of ongoing revenue-mobilisation reforms.
The latest figures come as Nigeria continues to pursue reforms aimed at improving domestic revenue mobilisation, reducing dependence on federal allocations and strengthening the capacity of sub-national governments to finance public services.
With direct assessment revenue rising by nearly 30 per cent in one year, the data points to a growing contribution from self-employed and other individually assessed taxpayers to state-level revenue, while also underscoring the need to balance improved tax collection with effective administration and compliance.