The Lagos State government plans to generate an annual revenue of N200 billion by expanding its income tax base to include remote workers.
This initiative, which also involves leveraging digital solutions, aims to increase the state’s internally generated revenue (IGR) to N5 trillion under Governor Babajide Sanwo-Olu’s administration.
The government is set to introduce a Resident Global Digital Citizen Tax Management System, targeting not just local remote workers but also foreign firms and digital influencers operating within the state.
This system will include the accreditation and licensing of digital economy operators, supported by an e-Portal, a Marketplace, and a Recovery Platform. The budget for this digital taxation initiative is estimated at N250 million.
Scheduled for September 25-26, 2024, the EKO Revenue Plus Summit will explore strategies to unlock new revenue streams for Lagos State. The summit, themed “Unlocking New Revenue Streams for Lagos State,” will focus on technology-driven methods to broaden the tax base and reach the ambitious N5 trillion IGR goal.
The digital economy sector alone aims to contribute N200 billion annually, drawing from about two million residents. The state has identified four core sectors for additional revenue generation: the Property Industry, expected to generate N1.5 trillion; the Digital Economy, projected to add N750 billion; the Informal Sector, anticipated to bring in N460 billion; and the Circular Economy, expected to contribute N20 billion.
To achieve these targets, Lagos State plans to use technology to enhance tax administration and explore new revenue avenues. The state aims to lay a strong financial foundation through innovative strategies and optimisation of current processes.
In addition to these, the Lagos State government is considering implementing a N500 entertainment tax, which could generate up to N20 billion annually. This proposal will be a key discussion point at the upcoming summit, as the government explores multiple avenues to bolster its fiscal capacity.
Beyond the entertainment tax, the government is exploring several initiatives, including a Content Aggregation Platform and Gateway, a Digital Schools Project, a BPO and Open TechHub Project, and Smart City Infrastructure and Services.
These projects aim to capitalise on digital advancements and the growing demand for tech-driven solutions in education and entertainment.
For instance, the Digital Schools Project is expected to provide quality education to 20,000 students, each paying N50,000 per semester, thereby generating N1 billion annually.
Collaborations with tech giants like Microsoft, Huawei, and Google are also in the works, alongside investment partnerships with firms like Partech Africa and Chevron Nigeria.
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