Improving public agency performance vis-à-vis productivity is the greatest challenge facing the public sector. The main objective of this study is to determine the effectiveness of performance measurement using balanced scorecard (BSC) in Lagos Internal Revenue Service (LIRS). Primary and secondary data were utilized for the study. The primary data collected was analyzed using both descriptive and inferential statistics. Descriptive statistics, such as frequency tables and simple percentages, were used in data presentation and analysis. while the stated hypotheses were tested using Regression Analysis. The study adopts the theory of change (ToC) postulated by Weiss as a theoretical basis. The findings of the study reveal that using the balanced scorecard to measure performance periodically with stakeholders' reflection in LIRS has increased significantly the annual revenue generation in Lagos State. The study recommends among others that more attention should be paid to the provision of adequate incentives as well as training and development on contemporary issues in tax management for tax officers to promote their efficiency and effectiveness in developing economies including Nigeria. Furthermore, since citizens' expectation on societal general development and demand varies across various divisions and localities in Lagos State, the state government should, therefore, accommodate the aspirations of the various groups to engender sustainable tax compliance by citizens
