Lagos to Tax Freelancers, Influencers in Drive to Generate N200 Billion Annually

The Lagos state government has unveiled plans to generate N200 billion annually by extending its income tax base to include freelancers and influencers. This effort is part of a broader strategy to amass N5 trillion in internal revenue for the state.

These plans will be a central focus at the upcoming ‘EKO Revenue Plus Summit,’ set for September 25-26, 2024. Themed ‘Unlocking New Revenue Streams for Lagos State,’ the summit will delve into strategies to bolster the state’s fiscal capabilities and employ digital solutions for improved revenue collection.

“We have pinpointed four primary sub-sectors of the state’s economy with significant revenue generation potential, aiming to achieve an additional IGR of about N2.73 trillion,” stated the government.

The prioritized sub-sectors are property, digital economy, informal sector, and circular economy, complemented by energy and IPPs, which serve as support pillars and catalysts for the overall economic development of the state.

One key area is the digital economy, where Lagos plans to introduce a resident global digital citizen tax management system. This system will target remote workers for foreign firms, freelancers, gig workers, influencers, and shared economy operators.

The system will also involve accrediting and licensing digital economy practitioners and operators, including platform owners, e-commerce operators, shared economy platforms, online education platforms, marketplaces, and food delivery platforms.

The state aims to generate N200 billion annually from two million people within this sector. The Lagos digital economy is estimated to be worth between $20 and $25 billion, accounting for about 10 percent of the state’s GDP.

“The digital economy in Lagos is growing at a rapid pace, with estimates suggesting a 20-25% annual growth rate,” the government document noted.

Additional revenue targets for the digital economy sector include the digitalization of government services, data monetization, the Lagos state fintech hub, and the Lagos state software development center. Other initiatives include the Lagos state digital economy acceleration hub, the Lagos state advertisement network, a blockchain and tokenization agenda, and collaboration with the federal government on digital service tax (DST).