May 17, (THEWILL) — Lagos State House of Assembly is considering the “Lagos State Harmonised Taxes and Levies (Approved List for Collection) Bill 2025” to eliminate multiple taxation and illegal levies.
The proposed law, which underwent public hearings recently, aims to consolidate over 60 different levies into nine primary categories.
Essentially, it bans unauthorised groups, including unions or thugs, from collecting taxes or setting up roadblocks to extort money from transporters and traders which has plagued individuals and businesses over the years.
It streamlines revenue mobilisation, reducing corruption and leakage by ensuring that only legally empowered tax authorities can engage in revenue collection.
The policy also reduces the harassment of residents by unauthorised groups, leading to higher compliance rates as it enhances transparency and simplifies tax administration through comprehensive electronic systems.
When the law is instituted, offenders face a fine of up to N5 million, three years imprisonment, or both for engaging in unauthorised tax collection.
This legislative effort aligns with the Federal Government’s fiscal reforms and is intended to improve ease of doing business in Lagos state, as lowering the burden of multiple, unofficial taxes allows SMEs and corporate bodies to operate more efficiently.
Since the launch of the tax reform initiative in 2023, which has led to the implementation of current tax laws nationwide, the primary focus has been on expanding the tax base, refining the tax administration process, and increasing revenue.
Despite the widely praised tax reform laws, there are fears that it is unlikely that state and local governments will reap the benefits that the new system is purported to provide. Residents who do not belong to the categories of citizens intended to benefit from the new tax laws are facing troubling circumstances.
This is because small businesses continue to struggle under the burden of multiple taxes, excessive levies, and the overreaching enforcement of laws imposed by these levels of (state and local) government. The laws are applied in an exceedingly harsh manner, a practice that has persisted over the years. Daily, these individuals confront the harsh realities of an abnormal system that has become the norm.
It is particularly praiseworthy that this initiative for a transparent revenue collection process originates from Lagos, given that it serves as the commercial hub of the nation. However, it is also known for its issues with illegal taxes and excessive taxation, which have been replicated by other states and have become a significant concern.
Aligning the revenue systems of state and local governments with the financial reforms of the Federal Government and the National Tax Policy has been a central topic in discussions aimed at creating an efficient fiscal environment. This is essential for enhancing legitimate revenue generation, which in turn facilitates improved funding for schools, roads, hospitals, and other social amenities.
Lagos must advocate for the swift enactment of the “Lagos State Harmonised Taxes and Levies (Approved List for Collection) Bill 2025” into law without delay. The members of the Assembly should recognise their duty to create effective legislation that will benefit the populace and stimulate economic activities. It is only when the economy thrives and governance is effective that tax compliance will improve and revenue will increase.
The current situation is not merely a nightmare; it disheartens genuine entrepreneurship and undermines the much-needed ease of doing business.
Throughout the state, young and capable individuals flood the streets and markets to extort money from traders and transporters in a brutal manner that fosters intimidation and promotes lawlessness. This has instilled in many of them the belief that impunity is a lifestyle to be vigorously pursued, rather than engaging in educational pursuits or skill development.
Individuals of this nature act as a reservoir for the mobilisation of social miscreants, facilitating undesirable activities such as thuggery, contracted killings, and various other criminal ventures that undermine the effective governance of our society.
Furthermore, it depicts the legal system as feeble and regressive, as victims of this dreadful system seldom receive justice when victimized. Consequently, we establish a system that struggles to keep up with more enlightened and developed societies.
It is crucial to implement a robust awareness campaign to inform the public about the current legislative efforts aimed at cleaning up the fiscal environment and eliminating the infamous practice of illegal levies and excessive taxation.
In particular, representatives and officials from transport unions, traders’ associations, law enforcement agencies, and other key stakeholders must be thoroughly engaged in the law-making process. Local government authorities should be actively involved in public hearings and other phases of the legislative process.
In this manner, Lagos has the opportunity to establish robust legislation aimed at eradicating the infamous practice of illegal levies and excessive taxation, which have undermined the well-meaning policies of the government, thereby fostering the perception that we exist in a society characterized by brutality and the dominance of terror.
This will ensure that the advantages of the tax reform initiatives implemented by the Nigerian Government flow down to the grassroots.
