FIRS begins Real Time Direct Collection of Tax from Online Gaming Transactions

The Federal Inland Revenue Service (FIRS) recently put out a public notice; that in line with extant tax laws, it will commence the deduction of taxes at transaction points, from Online Gaming companies using the Sentinal National Payment Gateway and Electronic Solution.

The notice issued to the public, which was signed by the Executive Chairman of FIRS; Mr. Muhammad Nami,  stated that the FIRS is automating the administration of tax, on online gaming transactions, using Sentinal National Payment Gateway and Electronic Solution.

The notice also directed that every operator offering online gaming services in Nigeria, is required to connect to the payment gateway, not later than the 31st of December, 2022

The Chairman explained that the Sentinal National Payment Gateway, was a transaction processing system that will enable Integrated Payment Service Providers, to deduct taxes at the points of transaction, and immediately remit the deducted tax, directly to the government’s treasury.

He explained further that the FIRS, have been very impressed with the Sentinal platform, which has allowed them to not only collect tax revenues at source, but has also provided them, with tax reporting and monitoring tools, in real time.

Nami went on to state that the deployment of the Sentinal National Payment Gateway, will simplify tax compliance for companies, engaged in online gaming activities, and that the Gateway’s system will also integrate with FIRS’ own TaxPro Max potal.

Furthermore, the notice outlined that; even though it is not compulsory, for online gaming operators, operating outside Nigeria, to be incorporated in the country; however, they are compelled by extant tax laws, to connect to the payment Gateway, for the purposes of deducting tax, from the gaming transactions of players in Nigeria, and remitting same, directly to the government coffers.

The Chairman described the new approach as an innovation that was needed to harness technology for the purposes of improved revenue generation; especially in the area e-commerce, as well as accountability.

According to him, “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.

The DG of the National Lottery Regulatory Commission; Mr. Lanre Gbajabiamila, at a meeting with the FIRS officials, stated that online gaming, has continued to grow rapidly in Nigeria, particularly on mobile, and that the adoption of E-technologies’ Sentinal National Payment Gateway, is a big step that will allow gaming transactions at source.

According to the DG, all responsible offshore gaming operators, are welcome to apply for a Remote Operator Permit, as long as they pass all the relevant criteria, including full AML screening and responsible gaming practices.

The CEO of the e’technoloies; David Kicks also expressed his delight that the Nigerian Government has made the decision to integrate the Sentinal System, which empowers them to streamline online taxation. He added that by understanding better, how the payments ecosystem behaves and evolves, they can drive a paradigm shift towards a point of consumption tax methodology.



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