The Lagos State government has announced its plans to generate an additional NGN200 billion in annual revenue by introducing taxes for remote workers. This move is part of the state’s efforts to increase its internally generated revenue (IGR) and reduce its reliance on federal allocations.
The Lagos State government has revealed a comprehensive plan to increase its internally generated revenue (IGR) by introducing a Resident Global Digital Citizen Tax Management System. The new tax system, which targets remote workers, foreign companies, and digital influencers, is expected to generate an additional NGN200 billion annually.
The announcement was made ahead of the EKO Revenue Plus Summit scheduled for September 25th and 26th, 2024, themed “Unlocking New Revenue Streams for Lagos State.” This ambitious plan seeks to raise NGN5 trillion from four major sectors, including the digital economy.
In addition to the new tax system, the Lagos State government aims to enhance its revenue collection process through digital solutions, such as accreditation and licensing of digital economy operators, an e-portal, marketplace, and recovery platform.
To achieve this goal, the state government has allocated an estimated budget of NGN250 million to cover various aspects of the initiative, including portal construction, data mining, partnerships, stakeholder engagement, and communications.
The state intends to generate NGN200 billion annually from approximately two million people in this sector, underscoring its commitment to tapping into the digital economy to boost its finances and reduce its reliance on federal allocations.
NAIRAMETRICS
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.
