The Lagos State Government has unveiled an ambitious plan to generate 200 billion naira annually by expanding the income tax base to remote workers and improving tax collection through the use of digital solutions.
According to a summary document of the EKO Revenue Plus Summit, scheduled to be held on September 25th and 26th, 2024 with the theme “Unlocking New Revenue Streams for Lagos State”, the Southwestern state plans to raise 5 trillion naira through four key sectors that generate Internally Generated Revenue (IGR).
One of these sectors is the digital economy, through which Lagos State plans to launch a Resident Global Digital Citizen Tax Management System targeting remote workers, foreign businesses, and digital influencers.
The system also includes certification and licensing of digital economy operators supported by a robust platform with e-Portal, Market Place, and a Recovery Platform.
According to a summary document, the initiative has an estimated budget of 250 million naira and will include portal construction, data mining, partnerships, stakeholder engagement, and communication.
The Southwestern state aims to generate 200 billion naira annually from the region’s population of about 2 million.
Other revenue targets for the digital economy sector;
Digitization of government services and data monetization: Lagos state plans to develop a public data marketplace to license and monetize data from various government services. Key components are the Lagos ProveIT app and the Lagos State Document Validation and Authentication app. The initiative is expected to cost 500 million naira and generate 50 billion naira in revenue per year.
Lagos state fintech hub: The state plans to establish a fintech hub to support digital payments, mobile money, lending, and crowdfunding. With a planned budget of 5 billion naira, annual revenue from transaction fees and platform services from providers is expected to be 100 billion naira.
Lagos State Software Development Centre: A new hub is also planned that will focus on developing software solutions for the financial industry, SMEs, and retail. With a budget of 500 million naira, the initiative is expected to generate 150 billion naira per year from subscription and service fees.
Lagos State Digital Economy Acceleration Hub: The initiative involves the selection and development of 100 innovative startups through a hackathon and subsequent support, with an estimated cost of 12 billion naira and an expected annual revenue of 100 billion naira from a profit-sharing model.
Lagos State Advertising Network: The creation of a state advertising network and permit management platform is planned. It has a budget of 500 million naira and is expected to generate 15 billion naira in annual revenue from receipts, fees, permits, etc.
Blockchain and Tokenization Agenda: Lagos State plans to tokenize real estate, infrastructure, and intellectual property. The project will require 500 million naira and aims to generate 100 billion naira annually from revenues, fees, and permits.
Collaboration with FGN on Digital Services Tax (DST): The state plans to collaborate with the Federal Government to implement DST to generate revenue from global digital platforms operating in Nigeria. The partnership has a budget of 750 million naira and is expected to generate 50 billion naira annually.
With the EKO Revenue Plus Summit in September, Lagos State plans to achieve 5 trillion naira in Internally Generated Revenue (IGR) under the current administration of Governor Babajide Sanwo-Olu.
A part of the document read: “Increasing Lagos State IGR to 5 Trillion Naira in the life of the current administration requires a comprehensive and innovative approach that leverages technology, strengthens tax administration, expands the tax base and explores new revenue stream options, especially in the non-tax areas, while optimizing the existing processes.”
While optimizing existing processes, it will also explore revenue opportunities, especially in non-tax areas. The Lagos State Government has set an ambitious target to significantly increase its Internally Generated Revenue (IGR) through the Lagos New Money Initiative.
The plan aims to increase the IGR to a staggering amount of 5 trillion naira by generating additional revenue streams amounting to 2.73 trillion naira. The initiative is aimed at building a strong fiscal base for the state, building on the existing IGR framework target of N1.25 trillion.
The Lagos State Government has identified four key sub-sectors of the state’s economy as key areas for additional revenue generation, targeting an additional IGR of about N2.73 trillion.
These sub-sectors, which include real estate, digital economy, informal sector, and circular economy, are expected to contribute significantly to the state’s fiscal growth.
The real estate industry alone is expected to generate revenue of N1.5 trillion, while the digital economy is expected to contribute N750 billion. The informal sector is expected to generate an inflow of N460 billion.
