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FIRS begins taxing online gaming operators

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By Abiodun Okunloye

Nigeria's Tax Agency, FIRS Starts Collecting Taxes From Online Gaming Operators.

The Federal Inland Revenue Service (FIRS), which is Nigeria’s Tax agency, recently made an announcement that it has begun the process of directly deducting and collecting taxes at points of transaction from Online Gaming companies by utilizing the Sentinel National Payment Gateway and Electronic Solution. This information was communicated to the media on Wednesday by Johannes Oluwatobi Wojuola, who serves as the Special Assistant on Media and Communication to the Executive Chairman of the FIRS.

Muhammad Nami, the Service’s Executive Chairman, while urging the online Gaming community to fully comply, he explained in the statement that the Sentinel National Payment Gateway will operate a transaction processing system that allows Integrated Payment Services Providers to remove taxes at the transaction points and instantly remit the tax deducted to the treasury of government, it reads “The FIRS is automating the administration of tax on online gaming using Sentinel National Payment Gateway and Electronic Solution.”

All online gaming operators in and outside Nigeria would be taxed.

With the implementation of the Sentinel National Payment Gateway, it will make tax compliance easier for companies who are involved in the operation of online gaming platforms. The Service also noted that all operators that provide online gaming services in Nigeria were required to integrate into the Sentinel National Payment Gateway, subtract tax from all online gaming transactions, and directly remit the same to the relevant government’s treasury by the end of the year 2022 at the latest.

More so, as regards online gaming operators who provide online gaming services from outside Nigeria to Nigeria gamers, the notice stated that although it was not mandatory tor then to be incorporated in Nigeria, however, they are obligated by extant tax laws to integrate with the Sentinel National Payment Gateway for the specific purpose of removing tax from the gaming transactions of players who are in Nigeria and remit them directly to the purse of government.

Nigeria needs funds for local infrastructure and public services.

When addressing the approach of the Tax Collection at the point of transaction, Nami added that Nigeria needed to innovate and take advantage of Technology for more e-commerce revenue generating and accountability. He explained that the obligation on governments to raise Tax Revenue as a percentage of GDP is great when the world enters a difficult period, according to Nami, in order to raise much needed funds for local Infrastructure and public services. Nigeria must embrace Innovation and technological advancement to make sure that online transactions are taxed and properly recorded.

Speaking further, Nami affirmed that they had been really delighted with the Sentinel platform, which not only enables them to receive tax revenues at the source but also offers them real-time tax reporting and monitoring features. Moreover, Lanre Gbajabiamila, the Director General of the National Lottery Regulatory Commission of Nigeria, commented on the development during a meeting with the head of the tax authority and called the approval of the new innovation a “huge step” for taxing the gaming industry.

Operators that meet requirements can apply for a Remote Operator Permit.

Moreover, Gbajabiamila explained that as online gaming services continue to thrive rapidly in Nigeria, particularly for mobile, the adoption of Sentinel National Payment Gateway E-technologies is a tremendous notch which allows them to grasp gaming duty at the source. He also said that as long as they meet all applicable requirements, such as thorough AML screening and safe gaming operations, they are welcome to apply for a Remote Operator Permit. Being the first nation to adopt the Sentinel System, they take great pride in it as they believe Nigeria will profit greatly from it.


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