KEY POINTS

• In 2023, Nigerians paid ₦40.14bn as road taxes to states.
• Lagos State collects the highest, ₦16.74bn; Ebonyi records the largest spike in amount collected, 3,804.32 percent.
• Declines were sharpest in Enugu, Katsina and Cross River states.

The National Bureau of Statistics (NBS) under the Federal Government has revealed that Nigerians paid N40.14B road toll to the state governments in 2023, which was a 63.36 percent increase from N24.57B paid in the 2022.

The sharp upsurge points to the increasing significance of road taxes as a main source of revenue in states throughout the country.

Lagos tops while Ebonyi stands out as the top growing state

In 2023, Lagos State, Nigeria’s economic hub recorded road tax revenue of ₦16.74 billion, which amounted to 41.7 percent of the total income, despite not recording any road tax revenue in 2022 at all.

This robust collection made Lagos tops the road tax revenue contributors across the country.

Ebonyi State predictably topped the charts with the highest percentage increase at 3,804.32 percent – increasing by ₦2.85 billion in 2023 from ₦72.95 million recorded in 2022. Rivers State followed with a 270.66 percent increase (₦830.01 million), while states of Sokoto and Yobe grew 41.22 percent and 30.4 percent, respectively.

Road tax collection declines

Road tax collections were up in many states, but down sharply in others. Enugu state lost 95.12 percent of its revenue; ₦1.1billion in 2022, to ₦53.47 million in 2023.

Cross River State, which saw a decline of 62.54 percent from ₨3.26bn the previous year to ₨1.22bn, followed with Katsina with a 79.34 percent decline to ₨646.9m.

However, it is worthy to note that the Federal Capital Territory (FCT) had zero road tax revenue in 2023.

Isss (Internally generated revenue growth)

While road tax collections were not uniform across states, overall internally generated revenue (IGR) across Nigerian states rose 26 percent to ₦2.43 trillion in 2023 from ₦1.93 trillion recorded in 2022. This increase is part of a general process to increase state level fiscal capacity.

Last month earlier this year, the chairman of the Presidential Committee on Fiscal Policy, Taiwo Oyedele, proposed tax reforms to relieve Nigerians financial burden.

According to The Punch, under the proposals, taxes will also be stripped from staples, basic food, public transport and housing in an attempt to make the economy more affordable and stable.