States’ PAYE Tax Revenue Jumps 40% to N2.64 Trillion Amid Wage Hikes
Nigeria’s 36 states and the FCT collected N2.64 trillion in Pay-As-You-Earn (PAYE) tax in 2025, up 40.4% from N1.88 trillion the previous year, according to National Bureau of Statistics data. PAYE made up 69.5% of the N3.79 trillion total tax revenue gathered by states and the FCT, which rose 41.2% from N2.69 trillion in 2024. The jump in PAYE collections follows nationwide wage increases after the federal minimum wage was raised to N70,000 in July 2024, with states like Kano (N71,000 from Nov 2024), Katsina (N70,000 from Dec 2024), Rivers (N85,000 from Nov 2024) and Oyo (N80,000 from Jan 2025) implementing higher rates. Private firms also lifted pay to counter inflation, boosting payroll‑related tax inflows. Direct assessment grew 29.4% to N112.65 billion, withholding tax contributed about N503 billion, and other taxes rose 48.9% to N300.21 billion. Revenue from ministries, departments and agencies increased 40.2% to N1.36 trillion. Despite the higher tax take, many Nigerians still face low purchasing power amid macroeconomic reforms. Will the continued rise in PAYE give states more room to fund services, or will wage gains be eroded by inflation, leaving workers no better off?