The Federal Inland Revenue Service (FIRS) has commenced the deduction of taxes at transaction points from online betting and gaming operators.
This was revealed by Johannes Oluwatobi Wojuola, special assistant on media and communication to the FIRS chairman, who 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.
According to him, “The FIRS is automating the administration of tax on online gaming using Sentinel National Payment Gateway and Electronic Solution,” the statement reads.
“Sentinel National Payment Gateway is a transaction processing system that enables Integrated Payment Service Providers to deduct taxes at transaction points and remit the tax deducted directly to government’s treasury.
“The deployment of Sentinel National Payment Gateway will simplify tax compliance for companies engaged in online gaming activities.”
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.
“We have been very impressed with the Sentinel platform which allows us to not only collect tax revenues at source but also provides us with tax reporting and monitoring tools in real-time.
“The system will also integrate with our own TaxPro Max portal.”