Lagos State government has revealed a plan to impose a “State Excise Tax” on harmful goods including alcohol and tobacco as well as betting and gambling. Lagos betting tax
This information can be found in the state government’s first-quarter 2023 budget performance appraisal report, as seen by igaming Afrika.
In the first three months of the year 2023, the government’s income performance was 76 percent (N269,609bn), according to a report provided by the state Ministry of Economic Planning and Budget.
The report recommended that the state improve its existing low tax penetration in order to raise money.
Lagos State should impose a “State Excise Tax”, particularly on harmful goods like alcohol and tobacco. These taxes can also be imposed on betting and gambling winnings- an industry worth over $2 billion per annum and rising. There is a need to identify State-Owned asset value through third-party claims, then financialize these assets by issuing asset-backed securities. The State must focus on improving its currently low tax penetration. This will help to balance out the effects of raising taxes which often leads to slow economic growthstated the report.
The report also showed that as of December 2022, there was $1.25 billion in total external debt, with a total debt stock to GDP of 4.5 percent.
Additionally, the amount of total domestic debt as of December 2022 was estimated to be N807.2 billion, with a 69 percent domestic debt to external debt ratio at the time. Likewise, the ratio of total revenue to total debt stock was 71.2 percent.
The debt service to Gross State Income (GSI) ratio in Y2022 is 26.86 percent, a rise of 2.85 percent from Y2021, indicating a good balance between debt and revenue. While this may encourage additional borrowing, policymakers must consider the current realities of borrowing costs as global interest rates rise. Our Analysis suggested that the government focus on increasing transparency in debt contracts in order to encourage debt restructuring and build trust among current and future creditor groups.the report further stated.
The state’s N1.768 trillion (2023) “Budget of Continuity” was signed into law by Governor Babajide Sanwo-Olu in January.
A capital expenditure of N1.019 trillion, or 58% of the 2023 budget, is included in the 2023 Appropriations Bill. The N748 billion recurrent expenditure, or 42% of total spending, covers labor costs, overhead, and debt servicing.
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