Lagos Assembly backs tax unification bill, seeks robust

The Lagos State House of Assembly has unanimously advanced the **Harmonised Taxes and Levies (Approved List for Collection) Bill 2025**, signalling a major structural overhaul of the state's revenue collection system. The move represents one of Africa's largest economies' most ambitious tax simplification effort in a decade, with lawmakers now prioritising public education to smooth implementation.

Lagos generates roughly ₦1.9 trillion in internally generated revenue (IGR) annually, yet fragmentation across multiple overlapping levies—from business permits to waste management fees—has long frustrated investors and complicated compliance. The unification bill consolidates these into a harmonised framework, reducing administrative friction and creating a single, transparent ledger of obligations.

## Why Is Tax Unification Critical for Lagos Businesses?

The current system imposes hidden compliance costs. Small and medium enterprises (SMEs) report spending 15–20% of their tax budgets simply navigating conflicting levies across local government areas (LGAs) and state agencies. The harmonised approach eliminates duplicative collection, cuts paperwork, and creates predictability—essential for attracting foreign direct investment (FDI) into Lagos's real estate, fintech, and manufacturing hubs. This aligns with Nigeria's broader tax reform agenda under the Tinubu administration, which prioritises revenue modernisation without punitive rate hikes.

Governor Babajide Sanwo-Olu's administration expects the bill to increase compliance by 25–35%, particularly among informal-sector operators who currently avoid registration due to perceived complexity. A unified levy schedule also enables better capital allocation—the state can target spending on critical infrastructure without hidden subsidies buried in tax expenditure.

## What Happens During the Sensitisation Phase?

The Assembly's emphasis on "robust public sensitisation" is strategic. Tax reform in Lagos historically faces resistance from traders unions, transport associations, and small business networks who fear sudden cost increases. The government must communicate three key messages: (1) the new framework maintains or reduces effective tax rates for most SMEs; (2) payment channels will be digital-first, reducing face-to-face corruption; (3) revenue gains will fund schools, roads, and healthcare visibly, rebuilding public trust.

ABITECH intelligence suggests the state will launch a 90-day town hall campaign across the 20 LGAs, with bilingual materials in English and Pidgin English. Digital platforms—LIRS (Lagos Internal Revenue Service) mobile app and FIRS integration—will be critical to uptake. Previous reforms (property tax roll-out in 2019, e-billing in 2021) show that early stakeholder buy-in reduces implementation delays by 40%.

## Market Implications for Investors

The bill's passage signals fiscal discipline and institutional maturity—key factors S&P and Moody's monitor when assessing sub-national creditworthiness. Lagos's ability to raise clean, transparent revenue reduces reliance on federal allocation (currently 52% of the state's budget) and strengthens its capacity to issue green bonds for transport and renewable energy projects.

For foreign investors, harmonisation reduces perceived business risk. Multinational companies operating in Lagos cite tax clarity as a top-five operational concern; this reform directly addresses that.

The next phase: final legislative passage (expected Q2 2025), followed by LIRS rule-making and soft-launch testing with key sectors (fintech, manufacturing, retail). Full rollout is targeted for July 2025.

---

##