Lagos State Governor, Babajide Sanwo-Olu, has emphasized the need to expand Nigeria’s tax net by including Micro, Small, and Medium Enterprises (MSMEs) and high-net-worth individuals to tackle rampant tax evasion and enhance revenue generation. Represented by his Special Adviser on Taxation and Revenue, Ogungbo Abdul-Kabir Opeyemi, Sanwo-Olu made this call during the opening ceremony of the 27th Annual Tax Conference of the Chartered Institute of Taxation of Nigeria (CITN) in Abuja.
In his goodwill message, the governor highlighted a clause in the pending tax reform bills awaiting constitutional approval, which exempts employees earning below N800,000 annually from Personal Income Tax, as a potential loophole that must be addressed.
“The clause that caps taxable income at N800,000 per annum before Personal Income Tax applies requires deliberate strategies to ensure taxpayers operating within the MSME and start-up sectors are brought into the tax system. Additionally, there is a need to intensify Direct Assessment efforts targeting high-net-worth individuals to curb the growing trend of tax evasion across the country,” he stated.
Sanwo-Olu urged sub-national governments to take the lead in implementing these reforms rather than relying solely on the Federal Government. “It is imperative that as sub-nationals, we not only embrace but also spearhead the implementation of these reforms,” he said.
The governor further stressed the importance of policy commitments by state governments to update existing laws, adopt technology, invest in data analytics, and develop human capital to fully leverage the benefits of the proposed reforms.
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Highlighting Lagos State as a model for effective tax administration, Sanwo-Olu attributed the state’s recent milestone of generating N1 trillion in Internally Generated Revenue (IGR) in 2024 to its digital reforms and citizen-friendly tax compliance initiatives.
“Our payer-centric system has introduced conveniences that allow taxpayers to fulfill their obligations without leaving their comfort zones. This approach significantly boosted voluntary compliance, leading to the N1 trillion IGR achievement by the Lagos State Internal Revenue Service in the 2024 fiscal year,” he explained.
He noted that Lagos had implemented artificial intelligence chatbots for citizen engagement, integrated advanced data analytics, and created a unified platform through the Lagos Revenue Portal to improve efficiency and transparency.
Sanwo-Olu also pointed to additional initiatives such as a N10 billion partnership with the Bank of Industry to support MSMEs and the passage of the Lagos State Electricity Law in December 2024 to promote energy self-sufficiency and reduce dependence on the national grid.
Reiterating the significance of fiscal reforms for national development, he stated, “These elements are critical to unlocking the full potential of our tax reform efforts, enhancing fiscal capacity, and contributing meaningfully to Nigeria’s goal of achieving a $1 trillion economy.”
While commending President Bola Tinubu for his leadership in driving tax and economic reforms, the governor praised CITN for its dedication to fostering a resilient tax culture in Nigeria.
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