Kwara State has recorded a substantial increase in its Internally Generated Revenue (IGR), reaching N92 billion as more residents and businesses formalise their tax obligations.
The revenue growth follows a rise in tax compliance across the state, as Kwara tax compliance rose to drive IGR to N92 billion. This surge reflects a trend of economic actors entering the formal tax system, providing the state with a more stable revenue base.
The milestone provides the state with increased fiscal capacity. For many Nigerian states, reducing dependence on monthly allocations from the Federation Account Allocation Committee (FAAC) is a primary objective for achieving long-term economic stability and autonomy.
The Kwara State Internal Revenue Service (KWASRI) has been central to this revenue drive. By implementing digitalised collection processes, the agency has sought to reduce manual errors and expand the reach of the tax net to previously uncaptured sectors of the economy.
Fiscal reforms and revenue growth
The increase in IGR is driven by the formalisation of businesses and more efficient monitoring of tax compliance. Many of the new taxpayers are small and medium-sized enterprises (SMEs) that have previously operated outside the formal regulatory framework. The transition to formalisation often allows these businesses to access credit and participate in larger government contracts, creating a multiplier effect for the state economy.
Previously, the state’s revenue collection faced challenges related to a narrow tax base and inefficient collection methods. The current administration’s focus on digitising tax administration has targeted these specific inefficiencies to ensure more consistent and predictable inflows.
While the N92 billion figure represents a significant achievement, the state faces the ongoing task of balancing tax collection with the need to maintain a competitive business environment. Maintaining high levels of compliance requires continued investment in taxpayer education and the simplification of filing processes to prevent the discouragement of new entrants.
The state government intends to utilise the increased revenue to fund critical public services, including healthcare, education, and infrastructure projects. The focus remains on further expanding the tax base to include more participants in the informal economy through continued digital integration.
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