The Lagos State government has revealed an ambitious plan to increase its revenue by N200 billion annually by expanding its income tax base to include remote workers and leveraging digital solutions for enhanced revenue collection. This initiative is part of a broader strategy to raise N5 trillion in internally generated revenue (IGR) from key economic sectors.
The announcement was made in a synopsis for the EKO Revenue Plus Summit, set to take place on September 25th and 26th, 2024, under the theme “Unlocking New Revenue Streams for Lagos State.” One significant aspect of this plan involves the digital economy, where the state intends to implement a Resident Global Digital Citizen Tax Management System. This system will target remote workers, foreign companies, and digital influencers, incorporating accreditation and licensing of digital economy operators. The initiative’s estimated budget is N250 million, allocated for the development of an e-Portal, Market Place, and Recovery Platform, as well as data mining and stakeholder engagements.
Lagos State expects to generate N200 billion annually from approximately two million individuals through this system. Other components of the digital economy strategy include:
1. Digitalization of Government Services and Data Monetization: This involves creating a public data marketplace to license and monetize government service data. With a budget of N500 million, it is projected to generate N50 billion per year.
2. Lagos State Fintech Hub: A new hub focusing on digital payments, mobile money, lending, and crowdfunding, expected to bring in N100 billion annually with a budget of N5 billion.
3. Lagos State Software Development Center: Aimed at developing software for finance, SMEs, and the retail sector, this initiative has a projected annual revenue of N150 billion and a budget of N500 million.
4. Lagos State Digital Economy Acceleration Hub: This initiative includes support for 100 innovative startups, with an estimated cost of N12 billion and an expected annual revenue of N100 billion.
5. Lagos State Advertisement Network: A state-owned advertisement network, projected to generate N15 billion annually with a budget of N500 million.
6. Blockchain and Tokenization Agenda: This project, targeting real estate and intellectual property, is expected to generate N100 billion annually from income fees and permits, with a budget of N500 million.
7. Collaboration with FGN on Digital Service Tax (DST): A partnership with the Federal Government to implement DST, expected to bring in N50 billion annually, with a budget of N750 million.
The Lagos State government aims to increase its IGR to N5 trillion under the current administration of Governor Babajide Sanwo-Olu. This comprehensive plan focuses on leveraging technology, expanding the tax base, and exploring new revenue streams, particularly in non-tax areas, while optimizing existing processes.
The EKO Revenue Plus Summit will further detail these initiatives, which are part of the Lagos New Money Initiatives, targeting an additional N2.73 trillion in revenue to strengthen the state’s financial foundation. Key sectors identified for additional revenue include the Property Industry, Digital Economy, Informal Sector, and Circular Economy, with significant contributions expected from each.
Credit: Nairametrics (Text Excluding Headline)
