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By Zainab Ibrahim Rafindadi
For too long, the story of how Nigerian states have developed has been told as one of dependence. Budgets are made with anxious eyes on Abuja. Hopes rise or fall with monthly payments from the Federation Account Allocation Committee. Public planning depends on oil prices, exchange rates, politics, and changes in the country’s income. In this system, states act more as offices waiting for money than as drivers of development.
Katsina State, however, is beginning to chart a new path forward, breaking away from this pattern of dependency.
Its recent revenue growth isn’t just a financial gain; it sends a message about leadership. It shows that with discipline, technology, new ways of working, and strong leadership, a state can start to move away from depending on the federal government and build a more stable financial future.
The numbers are clear. In 2023, Katsina made N9.41 billion from its own sources. By the end of 2024, that number more than doubled to N19.78 billion. In 2025, it went up to N27.23 billion. In two years, the state almost tripled its own income. This is not normal growth. It shows that the system is being changed intentionally.
The heart of this change is the Katsina State Internal Revenue Service, under the Ministry of Finance. In the past three years, the agency has moved past the old idea of a tax office being just a collector. It is now an important part of the state’s move to modern finances. Its changes show a key point: raising revenue is not just about collecting money; it’s about making systems that are clear, fair, easy to track, and trustworthy.
One of the biggest changes is the end of cash collection across all 34 local governments. This one decision targets one of the long-time problems in public finance. Collecting cash is well-known to lead to losses, misuse, insufficient payments, and harassment. Cash systems make it easier for public funds to go missing between taxpayers and the government.
By moving collections to digital and bank options, Katsina has done more than just update payment methods. It has brought openness to an area that was hard to see before. Public money now leaves a clear record. Taxpayers get receipts. Revenue staff work within a system that can be watched. The government can more closely follow the money. In tax management, tracking money is key.
That’s why bringing in POS machines, online payments, the Central Billing System, and the “Pay Direct” platform matters. These tools make it easier to follow rules and lower the hassle that stops people and businesses from paying. In a country where tax steps can be slow, confusing, and easy to cheat, making things easy is not a small thing. It’s a big part of getting people to pay.
Bringing in electronic tax systems has helped to move this work forward. Using e-filing and electronic Tax Clearance Certificates, the state has reduced paperwork and face-to-face meetings. In 2024 alone, more than 15,000 people were checked directly through digital systems, bringing in over N826 million. Over 13,500 digital certificates were issued, while withholding tax collections exceeded N293 million. These numbers show more than money. They show an office that is more organised, uses data better, and cares about service.
You can see this same approach in motor vehicle management. Making licences easier with the online V-Central system has simplified vehicle registration and renewal, showing how digital government can both deliver better service and raise revenue. This is the best way to reform taxes: not just taking from citizens, but also making government easier for them.
The transport sector is another practical example. Motorcycle and tricycle riders are vital to Katsina’s daily life. They move workers, traders, students, goods, and more. Instead of imposing a strict payment system on them, the state introduced daily POS payments that align with their work. This matters because tax systems built in offices often fail. They succeed when they fit life on the streets, in markets, on farms, and in motor parks.
Katsina is also using data more. Setting up the Data Management Analytics System with the Joint Revenue Board shows a shift from guesswork to smart tax management. This is important for a fairer system. Across Nigeria, tax collection often falls most on people who are easy to reach: workers, small traders, drivers, and open businesses. Meanwhile, the wealthy and those with complex incomes often pay less or go unnoticed.
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A data-focused system helps fix this. It helps the state identify who can pay, track payments, prevent tax evasion, and work toward fairness. Fair taxes do not mean charging the poor more. It means making sure everyone pays what they can, and that the rich aren’t left out.
This is crucial because changing how taxes are collected should not turn into taking money unfairly. A state’s need for funds must stay balanced by fairness. Katsina’s work with markets and informal businesses shows it understands this balance.
Across Nigeria, markets are places where tax collection feels confusing, pushy, and unfriendly. Traders pay many fees, face unclear charges, encounter non-official collectors, and receive demands from many groups. These problems erode trust and prompt resistance. Katsina chose to make things simpler, not more threatening.
Major rural and commercial markets, including those in Charanchi, Funtua, Mashi, and Mai’adua, have been integrated into digital revenue collection systems through monitored POS terminals and certified collection agents. The introduction of consolidated digital demand notes and standardised tax codes is helping to reduce duplication and bring greater order to a historically fragmented system. For traders, this means more predictability. For the government, it means better monitoring. For the public, it means fewer opportunities for abuse.
The same idea applies to farmers. Katsina is very focused on farming, so real revenue changes must honour the role of farmers and people selling animals and farm goods. Open rate lists help prevent unfair charges and clarify terms for farmers and traders. In real terms, being open protects people.
Another important pillar of the reform is the expansion of the tax net through business premises registration across local government areas. Sustainable revenue growth cannot depend on overburdening the same taxpayers. It must come from more accurately identifying economic activity, gradually formalising businesses, and building a credible taxpayer database. This is not only useful for taxation; it is essential for planning. A government that does not know the businesses operating within its territory cannot properly support, regulate, or tax them fairly, or design policies to promote their growth.
This is why the planned Enterprise Data Warehouse could be one of the most important steps in the whole reform program. A single list of small businesses would give Katsina a clearer view of its real economy. It would help the government see where businesses are, which areas are growing, what help is needed, and where money can be made. Today, data is not just for tech experts. It is basic for development.
The gains are already visible. Monthly revenue collections, which once peaked at about N1.2 billion, have now surpassed N3.4 billion. Manual receipts have been replaced by digital payment systems. Informal collection arrangements are giving way to monitored electronic transactions. The tax base is expanding. Leakages are shrinking. Most importantly, the state is building a stronger shield against the uncertainties of federal allocations.
But every major change in tax collection raises a moral question. People do not exist just to pay government bills. Taxes are part of a deal between people and the government. People are more willing to pay when they see their money used for roads, schools, hospitals, security, water, markets, and better services. If income goes up but living conditions do not, people will stop wanting to pay. If collecting improves but spending remains unclear, trust will drop.
This is Katsina’s next step: making sure more revenue clearly leads to better lives. The state must pair new tax-collection methods with open reporting, citizen engagement, clear results, and evidence of public benefits. Taxpayers will keep asking: What does our money do? That question needs a real answer.
There are also practical risks that must be managed. Digital systems require cybersecurity. Taxpayer data must be protected. Revenue officers must be trained continuously. Citizens, especially in rural areas, must be supported to use new platforms. Technology can reduce corruption, but it can also create exclusion if poorly implemented. The state must therefore ensure that its digital reforms remain secure, inclusive, and user-friendly.
Katsina’s target of N41.15 billion in internally generated revenue by the end of 2026 is ambitious. But ambition is justified when it rests on reform rather than wishful thinking. Achieving that target will require consistency, institutional discipline, taxpayer trust, and continued expansion of the formal economy. The reforms must not become episodic. They must become culture.
In the end, this is more than a tax story. It is a story of governance maturity. It is the story of a state discovering that true development begins when revenue stops being a monthly expectation from elsewhere and becomes a disciplined expression of local capacity, accountability, and vision.
• Rafindadi is a policy analyst and writes from Katsina.
