Lagos plans to tax freelancers, influencers to generate N200bn annually

The Lagos state government has announced plans to generate N200 billion annually by expanding its income tax base to include freelancers and influencers.

This initiative, aimed at generating N5 trillion in internal revenue for the state, will be a key focus at the upcoming ‘EKO Revenue Plus Summit,’ scheduled for September 25 and 26, 2024.

The summit, themed ‘Unlocking New Revenue Streams for Lagos State,’ will explore strategies to boost the state’s fiscal capacity and use of digital solutions for enhanced revenue collection.

“We have identified four core sub-sectors of the state’s economy, with the potential for additional revenue generation to help us achieve an additional IGR of about N2.73 trillion,” the government said.

“The identified sub-sectors in order of priority are property, digital economy, informal sector and circular economy. These sub-sectors are complimented with energy and IPPs, being a support pillar for the four major sub-sectors and a catalyst for general economic development of the state.”

One of these sectors is the digital economy, where Lagos state intends to implement a resident global digital citizen tax management system.

The system will target remote workers for foreign firms, freelancers, gig workers, influencers, and shared economy operators.

This system will also include the accreditation and licencing of digital economy practitioners and operators, which includes platform owners, e-commerce operators, shared economy platforms, online education platforms, marketplace, and food delivery platforms.

The state aims to generate N200 billion annually from two million people in this area.

According to the government, the size of Lagos digital economy is estimated to be around $20 and 25 billion, representing approximately 10 percent of the state’s gross domestic product (GDP).

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

Other revenue targets for the digital economy sector include the digitalisation of government services and data monetisation, Lagos state fintech hub, and Lagos state software development centre.

Also mentioned are Lagos state digital economy acceleration hub, Lagos state advertisement network, blockchain and tokenisation agenda and collaboration with the federal government on digital service tax (DST).