The state that learned to earn
For too long, the story of development in many Nigerian states has been one of dependence. Budgets are prepared with anxious attention on Abuja, while hopes rise and fall with monthly allocations from the Federation Account Allocation Committee (FAAC). Public planning is tied to oil prices, exchange rates and fluctuations in national revenue. In such […]
For too long, the story of development in many Nigerian states has been one of dependence. Budgets are prepared with anxious attention on Abuja, while hopes rise and fall with monthly allocations from the Federation Account Allocation Committee (FAAC). Public planning is tied to oil prices, exchange rates and fluctuations in national revenue. In such a system, states often function as recipients of federal funds rather than drivers of their own development.
Katsina State, however, is beginning to chart a different course. Its recent revenue growth is more than a financial achievement; it is a statement about leadership, governance and institutional reform. It demonstrates that with discipline, technology, innovation and political will, a state can gradually reduce its dependence on federal allocations and build a more sustainable fiscal future.
The figures tell the story. In 2023, Katsina generated N9.41 billion in Internally Generated Revenue (IGR). By the end of 2024, that figure had more than doubled to N19.78 billion. In 2025, it rose further to N27.23 billion. Within two years, the state almost tripled its internally generated income. Such growth does not happen by accident; it reflects deliberate reforms and a commitment to changing the system.
Over the last three years, Katsina’s Internal Revenue Service (KTSIRS) has moved beyond the traditional image of a tax office as merely a collector of revenue. It has become a key institution in the state’s financial modernisation efforts. Its reforms underline an important principle: effective revenue generation is not simply about collecting more money; it is about creating systems that are transparent, accountable, efficient and trusted.
One of the most significant reforms has been the elimination of cash collections across all 34 local government areas. Cash-based systems have long been associated with leakages, under-remittance, abuse and weak accountability. By moving to digital and bank-based payments, Katsina has brought greater transparency into a sector that was previously difficult to monitor. Public funds now leave an auditable trail, taxpayers receive proper receipts, and government can track revenue more effectively.
The deployment of Point of Sale (PoS) machines, online payment platforms, the Central Billing System and the “Pay Direct” platform has further strengthened compliance. These tools simplify tax procedures and reduce the bureaucratic frustrations that often discourage payment. In a country where tax administration is frequently perceived as cumbersome and vulnerable to manipulation, convenience itself becomes a powerful reform tool.
The introduction of electronic tax administration has also delivered measurable results. Through e-filing systems and electronic Tax Clearance Certificates, paperwork and unnecessary physical interactions have been reduced significantly. In 2024 alone, more than 15,000 taxpayers were assessed through digital systems, generating over N826 million. More than 13,500 electronic certificates were issued, while withholding tax collections exceeded N293 million. These figures reflect not only increased revenue but also improved organisation, stronger data management and a more service-oriented institution.
The same philosophy is evident in motor vehicle administration. The online V-Central platform has simplified vehicle registration and licence renewal processes, demonstrating how digital governance can simultaneously improve public service delivery and boost revenue. Successful tax reform is not merely about collecting money; it is about making government work better for citizens.
Katsina is also increasingly relying on data-driven governance. The establishment of the Data Management Analytics System in partnership with the Joint Revenue Board marks a shift from estimation to evidence-based tax administration. This development is particularly important because tax systems often place disproportionate burdens on those who are easiest to reach—salary earners, small traders and transport operators—while wealthier individuals and businesses sometimes remain outside the system.
Major markets in Charanchi, Funtua, Mashi and Mai’adua have been integrated into digital revenue systems through monitored POS terminals and certified collection agents. Consolidated digital demand notices and standardised tax codes are reducing duplication and bringing order to a historically fragmented process. Traders benefit from predictability, government gains stronger oversight, and opportunities for abuse are reduced.
A similar approach has been adopted in the agricultural sector. As a predominantly agrarian state, Katsina cannot pursue revenue reforms that ignore the interests of farmers and livestock traders. The introduction of transparent rate schedules has helped reduce arbitrary charges and improve clarity for agricultural producers. In practical terms, transparency serves as a form of protection for citizens.
Another critical element of the reforms is the expansion of the tax base through business premises registration across local government areas. Sustainable revenue growth cannot come from placing heavier burdens on existing taxpayers. Instead, it requires identifying previously unregistered economic activities, formalising businesses gradually and building a credible taxpayer database. Such information is valuable not only for taxation but also for economic planning.
This is why the proposed Enterprise Data Warehouse may become one of the most important components of the reform agenda. A comprehensive database of businesses would provide government with a clearer picture of the state’s economy, helping policymakers identify growth areas, understand investment needs and design more effective development strategies. In the modern economy, data is no longer a luxury; it is a necessity.
The impact of these reforms is already evident. Monthly revenue collections that once peaked at about N1.2 billion have now exceeded N3.4 billion. Manual receipts have largely been replaced by digital systems, informal collection arrangements are giving way to monitored transactions, the tax base is expanding and leakages are shrinking. Most importantly, the state is building greater resilience against the uncertainties associated with federal allocations.
Yet every tax reform raises an important moral question. Citizens do not exist merely to finance government. Taxation is part of a social contract between the people and the state. Citizens are more willing to comply when they can see evidence that their contributions are being used to provide roads, schools, hospitals, water supply, security and other public services. If revenue rises without corresponding improvements in living conditions, public support for taxation will inevitably weaken.
This is therefore Katsina’s next challenge. Increased revenue must translate into visible improvements in the lives of citizens. The state must complement stronger revenue collection with transparent reporting, citizen engagement and measurable development outcomes. Taxpayers will continue to ask a simple question: What is our money achieving? Government must provide a convincing answer.
There are also practical risks that require attention. Digital systems demand strong cybersecurity safeguards. Taxpayer data must be protected. Revenue officers require continuous training, while citizens—particularly those in rural communities—must receive support to navigate new technologies. While digitalisation can reduce corruption, it can also create exclusion if poorly implemented.
Katsina’s experience demonstrates that states are not condemned to perpetual dependence on federal allocations. Through institutional reforms, technology, data-driven governance and a commitment to transparency, a state can strengthen its financial independence. The challenge now is to sustain these gains and ensure that increased revenue translates into improved public welfare.
Zainab Ibrahim Rafindadi is a policy analyst and writes from Katsina