As part of efforts towards creating a tax environment that works for both businesses and individuals and providing clarity before the new tax laws go into effect, the Lagos State Government’s Office of the Special Adviser on Taxation and Revenue has proposed a single-digit nine taxes and levies payable, in line with constitutional provisions and the new tax act.
Speaking yesterday at a two-day tax reform summit, themed ‘The Lagos Implementation Roadmap’, and convened by the Special Adviser to the Governor on Taxation and Revenue, Abdul-Kabir Opeyemi Ogungbo, he noted that businesses have complained bitterly over the multiplicity and duplicity of taxes, and the proposed harmonisation will address this problem.
“A single hospitality outfit is being visited by over 16 revenue-generating bodies at a go; things like this must stop,” he said.
Presenting the state’s revenue harmonisation framework, he said the proposed nine taxes will include income tax, stamp duties, property tax, road tax and haulage levy.
The others are economic development levy, harmonised levy (covering shops, slaughter slab fee, motor parks, domestic animal fee, bicycles, trucks, canoes, wheelbarrows and carts, liquor licences, TV/radio fees and any other levy payable to the local government), user charge (covering marriage, birth and death registration fees, naming of street fees, signage and mobile advertisements, sewage and refuse disposal fees, burial ground permit fees, religious places establishment fees and wharf landing charge) and daily ticketing (covering all market levies, including transporters’ tickets).
He noted that this would aid taxpayer data centralisation and harmonise revenue operations across state and local governments.
He said they would set up a technical committee and develop a legal framework to guide the integration before sharing the harmonisation checklist. After this is done, he said it will be integrated and deployed, even as revenue agencies will be trained repeatedly on implementation.
Representing the Lagos State Governor, Babajide Sanwo-Olu, the state’s Attorney General and Commissioner for Justice, Lawal Pedro (SAN), who read the governor’s address, said it is important to have these conversations to help businesses and residents be aware of what to expect in the new year.
Adding that the harmonised taxes will go into effect in 2026, he said they intend to ensure full compliance and called for transparency and similar harmonisation at the national level so that what applies in Lagos, for instance, applies everywhere else all over the federation.
“The expected outcome of this summit is to have improved taxpayers’ confidence that will command voluntary compliance, because it is only when taxpayers pay tax that the different arms of government can begin to talk about distribution.
We also want to broaden our tax base, increase internally generated revenue (IGR) and, if not totally eliminate, at least reduce multiplicity of taxes and levies as much as possible,” he said.
The Executive Chair, Lagos State Internal Revenue Service (LIRS), Ayodele Subair, noted that this is an important step towards building taxpayers’ confidence, relieving the heavy tax burden on businesses and helping them plan better going forward.
Revealing that the proposed harmonisation seeks to trim the current Lagos State taxes from 65 to nine, he said this will go a long way in relieving pressures on businesses while also addressing multiplicity and duplicity of levies.
He assured that a major thrust of the ongoing tax reform is to alleviate poverty, especially with regard to food, accommodation and transportation, which he said are three key factors that affect every individual and drive inflation.
Adding that most of the abovementioned were exempted from VAT before, he said by 2026 they will be zero-rated, meaning no sales tax will be paid when these categories of services are bought or paid for.
He said with the current formula being proposed, everyone, including the farmer that grows the food in the farms, benefits intrinsically, unlike what obtains currently.
The summit also featured technical presentations and discussions from relevant government agencies, with Ogungbo noting that they intend to carry all the local governments and councils along to ensure full compliance, especially at that level. Chairperson, Conference 57 Lagos, Abdullahi Sesan Olowa, vowed that the issue of duplicity of taxes will be tackled right from the grassroots, and he intends to ensure full compliance when the harmonised taxes come into effect.
