The Federal Inland Revenue Service, FIRS, says it has started deducting taxes at transaction points of online betting.
Johannes Wojuola, Special Assistant on Media and Communication to the Executive Chairman of FIRS, Muhammad Nami, made this known in Abuja on Wednesday.
He stated that the FIRS uses the Sentinal National Payment Gateway and Electronic Solution to charge and collect the tax.
The Sentinal National Payment Gateway is a transaction processing system that enables integrated payment services providers to deduct taxes at the point of transaction and immediately remit to government’s treasury.
“The deployment of Sentinal National Payment Gateway will simplify tax compliance for companies engaged in online betting activities,’’ Wojuola quoted Nami as saying.
He urged operators of online gaming services to connect to the Gateway not later than Dec. 31.
Mr Nami said while it was not mandatory for operators offering online gaming services from outside Nigeria to be incorporated in Nigeria, extant tax laws required that they connect to the Gateway.
“This is for the purposes of deducting taxes from the gaming transactions of players in Nigeria, and remitting same directly to government’s purse,’’ he said
The FIRS boss stressed that Nigeria needed to innovate and harness technology for improved revenue generation from e-commerce as well as for accountability.
“The world is entering a challenging time where there is a strong obligation on governments to increase tax revenue as a percentage of GDP.
“This is 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.
“We have been very impressed with the Sentinal platform which allows us to collect tax revenues at source and also provides us with tax reporting and monitoring tools in real time.
“The system will also integrate with our own TaxPro Max portal,’’ Mr Nami said.
On his part, the Director-General of the National Lottery Regulatory Commission of Nigeria, Lanre Gbajabiamila, commended the adoption of the innovation.
Mr Gbajabiamila described it as a “huge step’’ for taxation in the betting industry.
“Online betting continues to grow rapidly in Nigeria, particularly on mobile phones and other devices following the adoption of e-technologies.
“Sentinal National Payment Gateway is a huge step for us to receive betting duty at source.
“We welcome all responsible offshore gaming operators to apply for a Remote Operator Permit as long as they pass all the relevant criteria including full screening and responsible gaming practices.
“We are proud to be the first country to adopt the Sentinal System and we believe it will bring real national benefit to Nigeria,’’ Wojuola also quoted Gbajabiamila as having said.
David Kicks, Chief Executive Officer of E-Technologies Global Ltd. and proprietor, Sentinal National Payment Gateway expressed excitement over the adoption of the system by the FIRS.
“Governments in rapidly-developing nations are struggling to keep pace with the evolution of e-commerce and the ascent of mobile transactions.
“We are thrilled that the Nigerian government has made the decision to integrate our Sentinal System, which empowers it to streamline online taxation.
“By understanding better how the payments ecosystem behaves and evolves, we can drive a paradigm shift towards a point of consumption tax methodology,’’ Mr Wojuola quoted Kicks as saying.