Lagos government to tax freelancers and influencers to generate N200bn annually

The Lagos State Government has unveiled an ambitious plan to expand its income tax base to include freelancers and influencers, aiming to generate N200 billion annually. 

This initiative is part of a broader strategy to boost the state’s internal revenue to N5 trillion.

“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 stated. These sub-sectors include property, digital economy, informal sector, and circular economy, with energy and IPPs serving as support pillars for overall economic development.

Focusing on the digital economy, Lagos State plans to implement 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, aiming to generate N200 billion annually from approximately two million people.

The system will also include the accreditation and licensing of digital economy practitioners and operators, such as platform owners, e-commerce operators, shared economy platforms, online education platforms, marketplaces, and food delivery platforms.

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

Additional revenue targets for the digital economy sector include the digitalisation of government services, data monetisation, the Lagos State fintech hub, and the Lagos State Software Development Centre. Other initiatives include the 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).