Lagos State, Nigeria’s commercial hub, recorded a 45% increase in internally generated revenue (IGR), reaching ₦1.3 trillion in 2024, up from ₦900 billion in 2023. The milestone, announced on May 12, 2025, by the Lagos State Internal Revenue Service (LIRS), underscores the state’s economic resilience and aggressive tax collection reforms, positioning it as a model for subnational fiscal sustainability.
The revenue surge was driven by enhanced tax compliance, digital payment systems, and diversification of income sources. Personal income tax, contributing 60% of IGR, rose to ₦780 billion, fueled by increased enforcement on high-net-worth individuals and corporate entities. The LIRS’s e-Tax platform, adopted by 85% of taxpayers, reduced evasion by automating assessments and remittances, while a whistleblower program exposed ₦50 billion in undeclared income. Non-tax revenue, including land use charges and market levies, grew 30% to ₦300 billion, supported by urban redevelopment projects like Eko Atlantic City.
Lagos’s economic dominance, accounting for 35% of Nigeria’s GDP, facilitated the growth, with key sectors like technology, real estate, and logistics thriving. The state’s 2024 budget of ₦2.2 trillion, 70% funded by IGR, supported infrastructure projects, including the Fourth Mainland Bridge and Red Line rail, enhancing investor confidence. Tax incentives for startups in Lekki’s tech hub attracted ₦200 billion in foreign direct investment, further boosting revenue. The state also benefited from a 20% increase in consumption taxes, driven by Lagos’s 15 million-strong population and vibrant retail sector.
Despite the achievement, challenges persist, including public resistance to high tax rates and disparities in revenue distribution, with 60% of funds concentrated in metropolitan areas like Ikeja and Victoria Island. Governor Babajide Sanwo-Olu has pledged to channel 40% of 2025 revenue into education and healthcare, addressing criticisms of underfunded social services. The LIRS aims to hit ₦1.8 trillion in 2025 by expanding tax nets to informal sectors, which employ 70% of Lagosians, and deploying AI-driven analytics to curb leakages.
The revenue growth strengthens Lagos’s fiscal autonomy, reducing reliance on federal allocations, which fell to ₦200 billion in 2024. As Nigeria grapples with economic reforms, Lagos’s model offers lessons in leveraging urbanization and technology for revenue generation, though sustaining public trust remains critical.
Discover more from RainSMediaRadio
Subscribe to get the latest posts sent to your email.
