Lottery Commission Exempts Licensed Online Gaming Operators from FIRS Direct Tax Collection

Sunday Aborisade in Abuja

The National Lottery Regulatory Commission (NLRC) has said that Online Gaming Operators in Nigeria, who are duly licensed are not affected by the new tax regime proposed by the Federal Inland Revenue Service (FIRS).
In a recent statement, the FIRS ordered all operators offering online gaming services in Nigeria to connect to the Sentinal system no later than December 31, 2022.

The tax agency was planning to generate tax from online gaming transactions using a platform run by a UK-based financial technology company.
But the Director General of the NLRC, Mr. Lanre Gbajabiamila, in a statement in Abuja, said that the proposed tax applied to remote gaming operators operating strictly outside the jurisdiction of the country.

Gbajabiamila said the clarification became necessary to douse the panic and confusion already created in the gaming industry in the country regarding the propriety and justification of the new tax regime.

He said the NLRC, as the agency created by law to regulate lottery/gaming in the country, needed to make the necessary clarifications and would not renege in carrying out its statutory assignment.
He said: “The NLRC deeply regrets any misconceptions these publications have caused to our esteemed gaming operators and other stakeholders in the industry in Nigeria.”

FIRS had on Wednesday said it was automating the administration of tax on online gaming, using Sentinal National Payment Gateway and Electronic Solution.
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 them to the government’s treasury.

The FIRS notice stated that it was not mandatory for online gaming operators offering online gaming services from outside Nigeria to be incorporated in Nigeria.
They must connect to the platform to deduct tax from gaming transactions of players in Nigeria, and remit directly to the government.

Part of the FIRS statement read, “Every operator offering online gaming services in Nigeria is required no later than Dec. 31, to connect to the Sentinal National Payment Gateway, where taxes will be deducted from the online gaming transactions and remitted directly to the relevant government treasury.
“All companies engaged in online gaming activities are to take note of this notice for compliance.
“The FIRS expects full compliance, as non-compliant operators shall be visited with sanctions by extant laws.”