Ekiti revenue hits N2.75bn monthly as tax compliance rises without enforcement

Olaniran Olatona, the Executive Chairman of the Ekiti State Internal Revenue Service (EKIRS), has said that the State’s Internally Generated Revenue (IGR) has continued to record unprecedented growth despite the suspension of tax enforcement, attributing the development to improved voluntary compliance, digital tax administration and a broader tax base.

Olatona said the Dtate had successfully demonstrated that sustainable revenue generation could be achieved through taxpayers’ trust rather than coercion, revealing that Ekiti recorded its highest-ever monthly IGR of N2.75 billion in June 2026.

Speaking at a press briefing held on Thursday at the Revenue House in Ado-Ekiti, the EKIRS boss said the performance had surpassed initial fears that the implementation of the new Federal Tax Administration laws and the suspension of enforcement activities would negatively impact the state’s revenue profile.

According to him, the service deliberately suspended active tax enforcement from July 8, 2025, to assess whether the reforms introduced under the new tax regime would encourage voluntary compliance.

“The test was simple: would revenue hold under voluntary compliance? The answer is yes,” he said.

Olatona noted that 13 months into the enforcement pause, Ekiti was collecting revenue at record levels and remained ahead of its budget projections.

He disclosed that EKIRS generated N27.09 billion in 2025, representing an increase of 53.7% over the N17.63 billion realised in 2024.

According to him, even after enforcement activities were suspended in the second half of 2025, collections continued to rise, with the state generating N13.65 billion, about N205 million higher than the N13.44 billion realised during the first half of the year when enforcement was fully operational.

Giving an update on the current year’s performance, Olatona said the first half of 2026 yielded N15.60 billion, representing a 16% increase over the corresponding period in 2025.

He added that revenue collections had consistently hovered around N2.74 billion monthly since April 2026, a trend which, if sustained, would see the state realise approximately N31.2 billion by the end of the year.

The EKIRS chairman attributed the steady growth to a combination of structural reforms rather than aggressive tax enforcement.

According to him, the introduction of multiple digital payment platforms has significantly reduced revenue leakages while making tax payment easier for residents.

He also identified the expansion of the Pay-As-You-Earn (PAYE) tax base across both public and private sectors, improved remittances of withholding taxes by financial institutions and corporate organisations, years of taxpayer enumeration, stronger compliance culture, and improved reconciliation of revenues across Ministries, Departments and Agencies (MDAs) as major drivers of the improved performance.

Olatona explained that PAYE remained the State’s biggest revenue source, accounting for about 63% of total collections.

However, he acknowledged that the informal sector remained significantly under-taxed despite its size and contribution to the economy.

He disclosed that taxes and levies generated from the informal sector amounted to N1.46 billion in 2025, representing only a small fraction of the state’s N27 billion IGR.

The breakdown, he said, included N1.23 billion from Direct Assessment, N59.54 million from commercial motorcycle operators, N57.5 million from haulage operations, N52.58 million from consumption tax, N51.45 million from business premises registration and artisan licensing, among other smaller revenue streams.

He noted that revenue from Direct Assessment had continued to decline, dropping from N161.9 million in January 2025 to N76.1 million in December 2025, while collections further declined by 47.2% in June 2026.

Describing the informal economy as the next frontier for revenue growth, Olatona assured residents that the service would pursue wider tax registration and assessment through fairness rather than intimidation.

“The informal sector remains under-taxed relative to its size. That is not a weakness in what we have built; it is the next frontier, and we intend to bring it in fairly through registration and assessment, not harassment,” he said.

The EKIRS chairman also addressed the recent controversy surrounding notices of tax assessment served on informal sector operators, insisting that the notices related strictly to the 2025 tax year and were issued in line with the provisions of the Nigeria Tax Administration Act, 2025.

He explained that the law empowers every taxpayer who disagrees with an assessment to file a formal notice of objection within 30 days, after which the tax authority is expected to review the assessment and respond within 90 days.

According to him, taxpayers dissatisfied with their assessments should utilise the legal dispute resolution process instead of resorting to protests and social media campaigns.

“We are surprised that many of the affected taxpayers failed to take advantage of the lawful channels provided by the Act to challenge their assessments but instead chose protests and blackmail on social media,” he said.

Olatona expressed appreciation to the Ewi of Ado-Ekiti, Oba Rufus Adejugbe, for intervening in the matter and helping to douse the tension, assuring that all genuine grievances arising from the notices of assessment would be resolved amicably without undermining the law.