The Federal Inland Revenue Service (FIRS) has commenced has commenced deductions of taxes from Online Gaming Transactions at the transaction points.
This was disclosed by the chairman, FIRS, Mohammed Nami in a public notice directing full compliance by the online gaming community.
A statement by his Special Assistant on Media and Communication Johannes Oluwatobi Wojuola on Wednesday explained that, the FIRS is using the Sentinal National Payment Gateway and Electronic Solution to deduct the taxes.
He quoted the FIRS Chairman explaining that, the Sentinal National Payment Gateway was a transaction processing system that enables Integrated Payment Services Providers to deduct taxes at the points of transaction and immediately remit the tax deducted to the government’s treasury.
He stated, “The FIRS is automating the administration of tax on online gaming using Sentinal National Payment Gateway and Electronic Solution.
“Sentinal 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 Sentinal National Payment Gateway will simplify tax compliance for companies engaged in online gaming activities”.
The Chairman stated in the Notice that, though it was not mandatory for the online gaming operators offering online gaming services from outside Nigeria to be incorporated in Nigeria, but they are compelled by extant tax laws to connect to the Sentinal National Payment Gateway for the purposes of dedicating tax from the gaming transactions of players in Nigeria, and remitting them directly to the government purse.
Nami, added that, this approach to tax collection at the point of transaction was the system needed to innovate and harness technology for improved revenue generation from e-commerce as well as for accountability.
He added, “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.
“We have been very impressed with the Sentinal 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 adding that, the system will also integrate with our own TaxPro Max portal.”
Quoted while speaking at a meeting with the FIRS Chiarman, the Director General (DG), National Lottery Regulatory Commission of Nigeria, Mr. Lanre Gbajabiamila commended the adoption of the system which he described as innovative and a “huge step” for taxation of the gaming industry.
He said, “Online gaming continues to grow rapidly in Nigeria, particularly on mobile, and the adoption of E-technologies’ Sentinal National Payment Gateway is a huge step for us to allow us to capture gaming duty at source.
“We are welcoming all responsible offshore gaming operators to apply for a Remote Operator Permit as long as they pass all the relevant criteria including full AML screening and responsible gaming practices.
“We are proud to be the first country to adopt the Sentinal System and we believe it will bring a real national benefit to Nigeria”.
On his part, the CEO of the E-Technologies Global Limited, the proprietors of the Sentinal National Payment Gateway David Kicks, expressed excitement over the adoption of the system by the Service.
He said, “Governments in rapidly developing nations are struggling to keep pace with the evolution of eCommerce and the ascent of mobile transactions.
“We are thrilled that the Nigerian Government has made the decision to integrate our Sentinal System, which empowers them 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”.
