But this time, a new kind of alert was spreading through WhatsApp groups and office WhatsApp statuses: Lagos was changing how it collected overdue taxes.

At the centre of this shift was a public notice from the Lagos State Internal Revenue Service (LIRS). The agency explained that when taxpayers fail to pay what they owe, it now had another tool, one that reaches beyond the usual reminders and penalties.

In the notice, LIRS spelled it out clearly:

“The NTAA 2025 empowers the Lagos State Internal Revenue Service to direct any person holding money on behalf of, or owing money to, a taxpayer who has failed to pay an established final tax liability when due, to remit such money to the Service in settlement (or partial settlement) of the outstanding tax.”

For many, that sentence felt like a plot twist. It meant that if a taxpayer refuses to settle a debt, Lagos could now send a notice to a bank, employer, tenant, debtor, or business partner who was holding money for that taxpayer, and order them to hand it over instead.

LIRS described this as “the Power of Substitution,” calling it “a lawful collection mechanism designed to ensure efficient recovery of unpaid taxes.”

This could cover Personal Income Tax, Capital Gains Tax, Stamp Duties and Withholding Tax, any of the revenue streams the agency administers.

Imagine a landlord collecting rent, a bank holding business accounts, or a partner waiting to pay an invoice.

Under the new framework, each could receive a substitution directive telling them to remit funds directly to LIRS instead of to the tax defaulter.

Once that happens, “the tax liability is deemed paid to the extent of the remittance made pursuant to the substitution.”

But Lagos didn’t leave anyone guessing about consequences. The notice warned plainly: “Failure to comply with such directive constitutes an offence under the Act.”

The directive places clear obligations on everyone who might receive one. Banks, for example, must “remit the stated amount to LIRS without delay and provide confirmation of compliance through the LIRS e-Tax platform.” They must also “report the taxpayer’s available balances and any encumbrances as may be requested.”

Meanwhile, employers, tenants and others are instructed to “withhold the specified amounts from funds due to the taxpayer and remit them to LIRS within the timeframe stated in the notice.”

There’s still a path for dispute, though. The notice reminded recipients that they can file a written objection within 30 days if they disagree with an assessment.

For Lagos, this announcement felt less like a bureaucratic update and more like a turning point, one that extends the reach of tax enforcement into the financial relationships that bind everyday business life in Africa’s busiest city.

The post Owing Tax in Lagos? The State May Collect From Your Bank or Tenant appeared first on Tech | Business | Economy.

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.

The post Lagos State Targets N5 Trillion Revenue with New Tax Initiatives for Remote Workers, Digital Economy appeared first on Tech | Business | Economy.