The Lagos State government has unveiled an ambitious plan to generate N200 billion annually by expanding its income tax base to include remote workers and leveraging digital solutions for enhanced revenue collection.
According to the synopsis document for the EKO Revenue Plus Summit, which is expected to hold on September 25th and 26th, 2024, with the theme “Unlocking New Revenue Streams for Lagos State”, this southwest state plans to raise N5 trillion internally generated revenue (IGR) from four major sectors.
One of such sectors is the digital economy, through which Lagos State plans to introduce a Resident Global Digital Citizen Tax Management System, targeting remote workers, foreign firms, and digital influencers.
This system will also involve accreditation and licensing of digital economy operators, supported by a robust platform including e-Portal, Market Place, and a Recovery Platform.
According to the synopsis document, the initiative’s estimated budget is N250 million, covering portal construction, data mining, partnerships, stakeholder engagements, and communications.
The southwest state aims to generate N200 billion annually from about two million people in this area.
Other revenue targets for the digital economy sector
Digitalization 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 include the Lagos ProveIT App and the Lagos State Document Validation and Authentication App. This initiative is expected to cost N500 million and potentially generate N50 billion per year.
Lagos State Fintech Hub: The state plans to establish a fintech hub to support digital payments, mobile money, lending, and crowdfunding. The projected budget is N5 billion, with an estimated annual revenue of N100 billion from vendor transaction fees and platform services.
Lagos State Software Development Center: It also targets a new hub focused on developing software solutions for finance, SMEs, and retail sectors is planned. With a budget of N500 million, the initiative aims to generate N150 billion annually from subscriptions and service fees.
Lagos State Digital Economy Acceleration Hub: This initiative involves selecting and developing 100 innovative startups through a hackathon and subsequent support, with an estimated cost of N12 billion and expected revenue of N100 billion per year from profit-sharing models.
Lagos State Advertisement Network: The creation of a state-owned advertisement network and approval management platform is anticipated. With a budget of N500 million, the projected annual revenue is N15 billion from income fees and permits.
Blockchain and Tokenization Agenda: Lagos State plans to implement tokenization for real estate, infrastructure, and intellectual property. This project will require N500 million and aims to generate N100 billion annually from income fees and permits.
Collaboration with FGN on Digital Service Tax (DST): The state plans to work with the Federal Government to implement DST, generating revenue from global digital platforms operating in Nigeria. This collaboration has a budget of N750 million and is projected to bring in N50 billion annually.
What you should know
With the EKO Revenue Plus Summit happening in September, Lagos State plans to hit N5 trillion in internally generated revenue (IGR) under the current governorship of 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.”
The Lagos State government has set an ambitious target to significantly boost its internally generated revenue (IGR) as part of the Lagos New Money Initiatives.
The plan aims to propel the IGR to a staggering N5 trillion by unlocking an additional N2.73 trillion stream of revenue.
This initiative is designed to build upon the existing IGR framework target of N1.25 trillion, thus creating a substantial financial foundation for the state.
The Lagos State government has identified four core sub-sectors of the state’s economy as key areas for additional revenue generation, aiming to achieve an incremental IGR of approximately N2.73 trillion.
These sub-sectors, which include the Property Industry, Digital Economy, Informal Sector, and Circular Economy, are each poised to contribute significantly to the state’s financial growth.
The Property Industry alone is expected to generate N1.5 trillion, while the Digital Economy is projected to add N750 billion. The Informal Sector is anticipated to bring in N460 billion, and the Circular Economy is expected to contribute N20 billion.