The Federal Inland Revenue Service (FIRS) says it has commenced the deduction of taxes at transaction points from online betting and gaming operators.
The FIRS Chairman, Muhammad Nami, who disclosed this yesterday in a statement by his media aide, Johannes Wojuola, also directed that the online gaming community must fully comply, using the Sentinel National Payment Gateway.
The statement reads: “The FIRS is automating the administration of tax on online gaming using Sentinel National Payment Gateway and Electronic Solution.
“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.”
Also, the tax collector directed all operators offering online gaming services to connect to the Sentinel National Payment Gateway, deduct tax from online gaming transactions — and remit directly to the relevant government treasury not later than December 31, 2022.
“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,” it added.
Regarding the collection tax at the point of transaction, Nami said Nigeria needs to innovate and harness technology for improved revenue generation.
He said: “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 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.”
The deployment of Sentinel National Payment Gateway will simplify tax compliance for companies engaged in online gaming activities.
