Lagos rakes in N1.44tn as tax net widens

Lagos State has achieved a remarkable surge in tax revenue, collecting N1.44tn in 2025. This figure nearly triples the N678bn collected two years prior and surpasses the N1tn mark reached in 2024. The Ministry of Finance attributed this sustained growth to investments in digital infrastructure, enhanced data sharing with federal agencies, and the inclusion of lotteries and gaming winnings in the tax base.

Internally generated revenue, encompassing both tax and non-tax income, climbed to N1.87tn in 2025, an 18.5% increase from the previous year. When combined with federal transfers, the state's total revenue reached N2.6tn, up 16% from 2024. This impressive performance contrasts sharply with the N773bn total revenue recorded in 2021.

The Lagos Internal Revenue Service has modernized its operations, completing a full transition to electronic filing in 2023. Its digital platform now covers stamp duties, capital gains tax, and expatriate tracking through integration with the Nigeria Immigration Service. Further integration with the Corporate Affairs Commission and the Financial Intelligence Unit allows for cross-referencing business and financial data against tax records. An AI chatbot assists taxpayers, and payments are accepted through various digital channels to reduce friction for businesses and individuals.

Enforcement has been strengthened through inter-agency collaboration, focusing on high-net-worth individuals and businesses. Top taxpayers must now submit outsourcing contracts during audits to prevent income obscuring, and withholding tax obligations have been extended to lottery and gaming winnings. Despite this growth, the ministry reported an 85% performance against targets in 2025, acknowledging a gap in projected revenue.

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The revenue growth had been achieved against a difficult macroeconomic backdrop, including elevated inflation and naira depreciation that eroded real purchasing power across the state.