Nigeria's 36 states and the Federal Capital Territory together raised ₦112.65 billion in direct assessment tax from self-employed persons and largely informal businesses during 2025, according to figures compiled from the National Bureau of Statistics.
The amount represents a 29.4 percent increase over the ₦87.05 billion recorded in 2024, translating to an additional ₦25.59 billion collected within one year.
Direct assessment is primarily a personal income tax mechanism applied to self-employed individuals whose earnings are not captured through the Pay-As-You-Earn system. It may also be imposed on informal businesses based on the scale of their economic activities.
Lagos State dominated the collections with ₦72.41 billion, equivalent to 64.3 percent of the national total. Rivers State followed with ₦6.26 billion, while Ogun State collected ₦4.89 billion. The Federal Capital Territory recorded ₦3.21 billion, and Benue State generated ₦2.63 billion.
Despite the year-on-year growth, direct assessment accounted for only about 3 percent of the ₦3.79 trillion in total tax revenue gathered by states and the FCT in 2025. It also represented just 2.2 percent of the ₦5.15 trillion total internally generated revenue recorded nationwide.
PAYE remained significantly larger, yielding ₦2.64 trillion and accounting for 69.51 percent of total state tax revenue. The wide margin between the two categories underscores the continuing difficulty states face in generating tax revenue from Nigeria's large informal and self-employed population.
