In a landmark move aimed at transforming its revenue landscape, the Lagos State Government has unveiled a comprehensive plan to drastically simplify its tax system. The reform, set for implementation in 2026, will see the number of official taxes and levies slashed from a staggering 65 down to a mere nine.
The Drive for Simpler Taxation in Nigeria's Economic Hub
The ambitious proposal was presented by the Office of the Special Adviser to the Governor on Taxation and Revenue during a two-day summit titled “The Lagos Implementation Roadmap” on Tuesday, December 23, 2025. Abdul-Kabir Opeyemi Ogungbo, the Special Adviser, stated that the reform is a direct response to persistent complaints from businesses and residents about excessive taxation and harassment by multiple revenue agents.
Ogungbo highlighted an unsustainable situation where some businesses, particularly in hospitality, face visits from over 16 different tax collection bodies. The new framework is designed to bring clarity, eliminate duplication, and foster a fairer environment for both residents and investors, thereby enhancing long-term compliance.
From Complexity to Clarity: The New Tax Structure
Under the proposed harmonisation, Lagos will consolidate its current multitude of charges into nine key areas. The main taxes will include:
- Income Tax
- Stamp Duties
- Property Tax
- Road Tax and Haulage Levy
- Economic Development Levy
A major component is the introduction of a broad harmonised levy. This single charge will encompass a wide range of items and activities previously taxed separately by local governments. This includes levies on bicycles, trucks, canoes, wheelbarrows, and carts, as well as fees for shops, motor parks, slaughter slabs, liquor licences, and TV/radio operations.
The reform also introduces a unified user charge for services like birth, death, and marriage registration, street naming, signage, refuse disposal, and burial permits. Furthermore, a daily ticketing system will cover all market-related levies and transporter tickets.
Implementation, Impact, and Broader Goals
To ensure a smooth transition, the state plans to establish a technical committee and develop a robust legal framework before the 2026 rollout. Revenue agents will undergo extensive training for consistent enforcement. Representing Governor Babajide Sanwo-Olu, the Attorney General and Commissioner for Justice, Lawal Pedro (SAN), emphasised the need to prepare the public and called for similar harmonisation at the national level.
Ayodele Subair, Chairman of the Lagos State Internal Revenue Service (LIRS), stated the reform would ease the tax burden on businesses, improve planning, and help reduce poverty by lowering costs associated with food, housing, and transportation. He also revealed that many essential goods and services previously VAT-exempt would become zero-rated by 2026.
In a show of solidarity, local governments pledged full support. Abdullahi Sesan Olowa, Chairperson of Conference 57 Lagos, committed to tackling tax duplication at the grassroots level once the new system takes effect. This collective effort aims to streamline revenue collection, improve data management, and ultimately boost economic confidence in Africa's mega-city.
