Online betting: FIRS now deducting tax at transaction point, operators get Dec 31 deadline

The Federal Inland Revenue Service (FIRS) says it has commenced the deduction of taxes at transaction points from online betting and gaming operators.
Johannes Oluwatobi Wojuola, special assistant on media and communication to the FIRS chairman, said this in a statement released on Wednesday.
He said Muhammad Nami, FIRS chairman, directed that the online gaming community must fully comply, using the Sentinel National Payment Gateway.
“The FIRS is automating the administration of tax on online gaming using Sentinel National Payment Gateway and Electronic Solution,” the statement reads.
The FIRS said all operators offering online gaming services, not later than December 31, 2022, are required to connect to the Sentinel National Payment Gateway, deduct tax from online gaming transactions — and remit directly to the relevant government treasury.
“Though it is not mandatory for online gaming operators offering online gaming services from outside Nigeria to be incorporated in Nigeria, they are compelled by extant tax laws to connect to the Sentinel National Payment Gateway to dedicate tax from the gaming transactions of players in Nigeria, and remitting same directly to the government purse,” the agency said.
Commenting on the approach of tax collection at the point of transaction, the FIRS chairman said the country needs to innovate and harness technology for improved revenue generation.
“The world is entering a challenging time where there is a strong obligation on governments to increase tax revenue as a percentage of GDP so as to provide much-needed funding for local infrastructure and public services. Nigeria needs to innovate and harness technology to ensure that online transactions are taxed and accounted for,” Nami said.
“The system will also integrate with our own TaxPro Max portal.”
‘HUGE STEP’ FOR TAXATION
Lanre Gbajabiamila, director-general of the National Lottery Regulatory Commission of Nigeria, commended the adoption of the innovation, describing it as a “huge step” for taxation in the gaming industry.
“Online gaming continues to grow rapidly in Nigeria, particularly on mobile, and the adoption of E-technologies’ Sentinel National Payment Gateway is a huge step for us to allow us to capture gaming duty at source,” he said.
David Kicks, chief executive officer, E-Technologies Global Limited, proprietors of the Sentinel National Payment Gateway, expressed excitement over the adoption of the system by the FIRS.