Grace Ashiru
The Lagos State Government has announced plans to generate ₦200 billion annually from approximately two million residents by taxing the digital economy sector. This initiative will expand the existing income tax base to include remote workers and digital influencers, while implementing advanced digital solutions to improve revenue collection. According to the details provided in the document for the upcoming EKO Revenue Plus Summit, scheduled for September 25 and 26, 2024, this move is a key component of the government’s wider aim to secure ₦5 trillion in internally generated revenue (IGR) by focusing on four main sub-sectors: the digital economy, property industry, informal sector, and circular economy.
The Lagos State government is set to introduce a Resident Global Digital Citizen Tax Management System aimed at remote workers, foreign companies, and digital influencers within the digital economy. This initiative will encompass the accreditation and licensing of operators in the digital economy and will include a thorough platform composed of an e-Portal, Market Place, and Recovery Platform.
The document outlines that the development of the portal, data mining, forming partnerships, engaging stakeholders, communications, and other related activities of this new system are projected to incur a cost of ₦250 million.
Plans for boosting additional revenue in the digital economy sector include creating a public data marketplace for licensing and monetizing data collected from various government services. Furthermore, the state aims to develop a fintech hub that will facilitate digital payments, mobile money, lending, and crowdfunding.
Additional initiatives for the digital economy involve setting up the Lagos State Software Development Center, the Lagos State Digital Economy Acceleration Hub, and the Lagos State Advertisement Network. There are also plans to implement the Blockchain and Tokenization Agenda and to collaborate with the Federal Government on the Digital Service Tax (DST).
Lagos State aims to raise its Internally Generated Revenue (IGR) to 5 trillion naira during the tenure of the current administration through a strategic, multifaceted approach. This plan involves embracing technology, enhancing tax administration, broadening the tax base, and identifying fresh revenue streams, particularly from non-tax sources, while also refining existing procedures. This initiative is part of the Lagos New Money Initiatives, targeting an additional ₦2.73 trillion in revenue to achieve the IGR goal.
The strategy includes tapping into the digital economy, which is expected to yield ₦750 billion. Additionally, the property sector is projected to contribute ₦1.5 trillion, while the informal sector and the circular economy are anticipated to bring in ₦460 billion and ₦20 billion, respectively.
