Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has called on the Lagos State Government to take bold measures in expanding its tax base to bridge the existing revenue gap. Speaking at the official launch of the Lagos Economic Development Update (LEDU) 2025, Oyedele noted that the state’s projected tax revenue of N2.79 trillion for 2025 is too small, considering its economic size.
Lagos’ Revenue Gap and Growth Potential
Lagos State, which recently became Africa’s second-largest economy with a GDP of $259 billion, currently generates less than 2% of its GDP in tax revenue. Oyedele emphasized that with strategic reforms, Lagos could double its tax revenue to N5 trillion annually.
He highlighted that the state’s GDP is projected to grow from N54.77 trillion in 2024 to N66.47 trillion in 2025, with a real GDP growth of up to 6.49%. However, for Lagos to meet its revenue goals, it must diversify its tax sources and attract foreign investment.
Expanding the Tax Net: Digital Entrepreneurs, Skit Makers, and Property Owners
Oyedele advised the government to focus on formalizing revenue collection from the informal sector, particularly digital entrepreneurs, skit makers, and content creators, who are among the high-income earners.
He also recommended formalizing property taxation to increase internally generated revenue (IGR). According to him, a harmonized and technology-driven tax collection system would help identify and tax more high-income earners without overburdening businesses.
“Tax the Fruit, Not the Seed” – A Call for Fair Taxation
Oyedele cautioned against excessive taxation that could stifle business growth. Instead, he urged the Lagos State Government to allow businesses to thrive before taxing them fairly on their profits.
“A better approach to taxation is not to tax the seed, but the fruit. Let businesses grow, and tax them fairly on their successes,” he stated.
Lagos’ Economic Strength and Future Outlook
With the Dangote Petrochemical Refinery boosting the state’s economy, Lagos has strengthened its position as a major economic hub. To sustain this momentum, Oyedele urged efficient tax policies that encourage investment, innovation, and entrepreneurship while ensuring sustainable revenue growth.
As Lagos moves toward achieving its ambitious N2.79 trillion revenue target for 2025, the implementation of fair and innovative tax policies will be crucial in unlocking its full economic potential.
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