The Ondo State Internal Revenue Service (ODIRS) has announced that the state’s internally generated revenue grew to N60 billion in 2025, marking a significant increase from N36 billion recorded in 2024 and representing the highest annual IGR ever generated in the state’s history. The figure underscores the impact of ongoing fiscal reforms, technology deployment, and improved taxpayer confidence in one of Nigeria’s South West states.
The Acting Chairman of ODIRS, Mr Bayo Rojugbokan, a tax expert, disclosed the figures in an interview with the News Agency of Nigeria (NAN) in Akure on Friday. He explained that the state’s monthly revenue rose from an average of N3 billion in 2024 to N5 billion in 2025. While core revenue directly accounted for an average of N3 billion monthly, additional inflows from other revenue generating agencies and investment channels brought the total monthly IGR to N5 billion.
From a fiscal policy perspective, Ondo State’s revenue performance stands out against a backdrop of generally weak IGR across Nigerian states. While FAAC allocations have surged significantly over the past three years, most states continue to rely heavily on federal transfers, with internally generated revenue contributing just 26 percent of total state revenues nationally. Ondo’s trajectory suggests that targeted reforms can meaningfully shift this balance, reducing dependency on volatile oil prices and federal politics.
Rojugbokan attributed the increase to improved transparency, accountability, and the deployment of technology in revenue collection and monitoring. “People now have more trust in the system. Payments are receipted digitally, and taxpayers can easily verify and store their records. This has reduced leakages and improved compliance,” he said. The shift toward digital receipts addresses a longstanding grievance among taxpayers who previously had limited means of verifying that their payments reached government coffers rather than unofficial channels.
The ongoing reforms in tax administration, including accurate assessment of taxpayers based on income rather than arbitrary increments, also contributed to the growth. Rojugbokan noted that the government had discontinued the previous practice of automatic annual tax increases, opting instead for assessments in line with existing laws. This approach reduces the friction between taxpayers and revenue authorities, potentially improving voluntary compliance while ensuring that assessments reflect actual earning capacity rather than bureaucratic targets.
For businesses operating in Ondo State, a more predictable and transparent tax environment reduces compliance costs and uncertainty. When taxpayers can verify their payment records and trust that competitors are similarly assessed, the perceived fairness of the system improves, encouraging broader participation. The state’s focus on expanding the tax net rather than merely increasing rates on existing payers reflects a more sustainable approach to revenue mobilisation, one that other states could usefully study.
Rojugbokan said efforts were ongoing to expand the state’s tax net and deploy more technology driven solutions, including the introduction of electronic ticketing systems to curb revenue leakages. Electronic ticketing, particularly in sectors such as transportation, hospitality, and markets, can capture transactions that previously occurred in cash without formal records, bringing economic activity into the formal tax base while providing businesses with verifiable documentation.
The state is optimistic of surpassing the 2025 performance in 2026, given the current revenue trajectory and ongoing reforms. “Our target from the government this year is about N33 billion for the core revenue. So, what we’re doing is that when the government gives us target, we come back home and give ourselves another target that is far ahead of what the government gave us. If we fail our own target, we will still meet the government’s target,” Rojugbokan explained. He added that the state was monthly meeting the government’s target and was even far ahead of it, expressing confidence that by December 2026, the state would have achieved beyond the prior year’s performance.
The implications of sustained IGR growth extend beyond the state’s balance sheet. Higher internally generated revenue provides fiscal space for capital investment in roads, healthcare, education, and security, all of which affect the business environment and quality of life for residents. It also reduces pressure on the state to borrow for recurrent expenditure, a trap that has ensnared many subnational governments. For credit rating agencies and development partners, a track record of revenue growth and fiscal discipline enhances the state’s creditworthiness and access to concessional financing.
However, sustaining this trajectory will require continued investment in the institutional capacity of ODIRS, including training for staff, maintenance of technology systems, and protection of the agency from political interference. Revenue agencies that perform well can become targets for political appointees seeking to redirect collections or relax enforcement for favoured constituencies. Maintaining the autonomy and professionalism of ODIRS will be essential to locking in the gains achieved.
