Road tax collections by Nigerian state governments surged by 63% in 2023, highlighting a crucial revenue stream for state-level budgets across the nation. As detailed in the National Bureau of Statistics (NBS) Internally Generated Revenue (IGR) report, road tax income climbed to N40.14 billion in 2023, up from N24.57 billion in 2022—a leap that underscores the role of road taxes in supporting infrastructure and public services.
Lagos State took the lead, contributing N16.74 billion, or 41.7% of the national total, reinforcing its position as a major economic hub. Meanwhile, the Federal Capital Territory (FCT) did not record any road tax revenue for the year, pointing to regional disparities in tax collection.
In a standout performance, Ebonyi State recorded an extraordinary 3,804.32% increase in road tax revenue, rising from just N72.95 million in 2022 to N2.85 billion in 2023. This dramatic growth signals effective local efforts to boost revenue, which can be channeled into vital development projects.
The uptick in road tax collection signals a shift for MSMEs and other businesses that rely on infrastructure, as better-maintained roads and transportation systems could facilitate smoother logistics and reduce costs. With road taxes playing an increasingly pivotal role, more states may look to enhance their revenue collection mechanisms, further bolstering opportunities for growth across Nigeria and potentially other African economies.
This trend also raises questions about the road tax policies across states, which vary in structure, and whether similar systems could be adopted to support financial self-sufficiency in other regions.
