The Federal Inland Revenue Service (FIRS) says it has started deducting taxes at transaction points of online betting.

FIRS executive chairman Muhammad Nami stated that the revenue service uses the Sentinal National Payment Gateway and Electronic Solution to charge and collect the tax.

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 deployment of Sentinal National Payment Gateway will simplify tax compliance for companies engaged in online betting activities,” Mr Nami said, according to a statement by his media aide, Johannes Wojuola.

He urged operators of online gaming services to connect to the Gateway no later than December 31.

Mr Nami said while it was not mandatory for operators offering online gaming services from outside Nigeria to be incorporated in Nigeria, extant tax laws required that they connect to the Gateway.

“This is for the purposes of deducting taxes from the gaming transactions of players in Nigeria and remitting same directly to government’s purse,” he said.

The FIRS boss stressed that Nigeria needed to innovate and harness technology for improved revenue generation from e-commerce and accountability.

“The world is entering a challenging time where there is a strong obligation on governments to increase tax revenue as a percentage of GDP.

“This is 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 system will also integrate with our own TaxPro Max portal,” Mr Nami said.

On his part, the director-general of the National Lottery Regulatory Commission of Nigeria, Lanre Gbajabiamila, commended the adoption of the innovation.

Mr Gbajabiamila described it as a “huge step” for taxation in the betting industry.

David Kicks, chief executive officer of E-Technologies Global Ltd. and proprietor of Sentinal National Payment Gateway, expressed excitement over the adoption of the system by the FIRS.

“We are thrilled that the Nigerian government has made the decision to integrate our Sentinal System, which empowers it 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,” Mr Kicks said. 

(NAN)