…States’ revenue rises 27% despite personal income tax cuts
…New law caps levies at nine categories, bans roadblocks, illegal collections

Twenty-one states have passed a harmonised tax law designed to dismantle Nigeria’s system of multiple taxation, curb illegal revenue collections and reduce the cost of doing business, the Joint Revenue Board (JRB) has disclosed.

The development comes as revenue collections in 23 states rose by 27 per cent in the first half of 2026, from N1.75 trillion in the first half of 2025 to N2.2 trillion in the first half of 2026, despite provisions under the new tax framework that reduce or eliminate personal income tax for eligible earners.

The Executive Secretary of the JRB, Olusegun Adesokan, disclosed this on Wednesday in Abuja, describing the harmonisation initiative as a major step towards ending arbitrary levies, overlapping taxes and exploitative collection practices that have increased operating costs for businesses and pushed up consumer prices.

Under the initiative, developed in collaboration with the Presidential Committee on Fiscal Policy and Tax Reforms, more than 100 different taxes, levies and charges imposed at the subnational level have been streamlined into nine approved categories.

The categories cover income tax, stamp duty, property tax, road tax, development levy, economic development levy, annual levies, user charges and other approved charges.

The reform is intended to replace fragmented state and local government revenue practices with a more predictable tax system, particularly for businesses operating across multiple jurisdictions.

For traders, manufacturers, transport operators and other businesses, the changes could reduce the financial burden of repeated tax demands, roadside collections and unofficial payments that raise the cost of moving goods and delivering services.

Adesokan said the new law expressly prohibits the sale of stickers and emblems for revenue collection, the establishment of roadblocks for tax purposes and unauthorised cash collections, warning that offenders would face legal consequences.

The JRB is also working with the police and state revenue authorities to establish a national task force to remove illegal revenue collectors from highways and transport corridors.

The planned enforcement operation will extend to local government areas, where businesses and transport operators frequently encounter multiple demands from different revenue-collecting authorities.

He attributed the high performance of the states in their internally generated revenue (IGR) to the broader objectives of the reforms, which include improving tax administration, expanding economic activity and bringing more taxpayers into the formal system rather than imposing heavier burdens on existing taxpayers.

The figures suggest that states can improve revenue mobilisation while reducing tax pressure on eligible individuals and businesses.

Adesokan said the central objective was to create a fairer system that allows Nigerians to earn more, expand their businesses and improve their livelihoods without being subjected to arbitrary tax demands.

“The mission is to ensure that the tax burden is fair and that Nigerians have the space to do their businesses, earn more and improve their livelihoods,” he said.
The reforms are also expected to increase disposable income for eligible workers by reducing personal income tax liabilities.

Adesokan illustrated the impact with an individual earning N20 million annually, whose monthly take-home pay, he said, could increase from about N1.281 million under the previous arrangement to approximately N1.362 million under the new framework.

“The difference amounts to about N81,000 monthly, or roughly N972,000 annually, depending on applicable deductions and individual circumstances,” he said.

Eligible deductions include pension contributions, mortgage interest and qualifying rent relief, which are used in determining taxable income under the relevant provisions.

According to Adesokan, the framework is designed to ensure that low-income earners pay reduced or no personal income tax where they qualify, while higher-income earners contribute in line with the applicable rules.

The broader economic objective is to leave workers with more money to spend, save or invest, potentially supporting household consumption and domestic business activity.

The harmonised law also introduces a more uniform framework for taxing businesses in the informal sector, addressing inconsistencies in the way states previously administered such taxes.

For small traders and entrepreneurs, the effectiveness of the exemption will depend not only on the provisions of the law but also on whether state and local revenue officials comply with the new rules.

To strengthen enforcement and improve coordination, the JRB is introducing a unified national Tax Identification system that will allow revenue authorities to access and verify taxpayer records across jurisdictions. At present over 100 million tax identification numbers have already been generated.

Under the arrangement, state revenue authorities will be able to verify relevant taxpayer information when individuals and businesses conduct transactions in other states, reducing repeated documentation and duplicate tax demands.

The system is also expected to simplify access to government permits, licences and other public services by improving coordination among revenue authorities.

Adesokan said the JRB would support state revenue agencies through digitalisation, training and closer institutional collaboration to ensure that the new framework translates into more efficient tax administration.

However, he said the success of the initiative will depend on effective enforcement, the readiness of state revenue systems and the willingness of local authorities to abandon unauthorised collection practices.