FIRS Begins Direct Deduction From Online Gaming Operators

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The Federal Inland Revenue Service (FIRS) has commenced the deduction of taxes at transaction points from Online Gaming Transactions using the Sentinal National Payment Gateway and Electronic Solution.

 

With this, all operators offering online gaming services in Nigeria are now compelled to connect to the  Sentinal National Payment Gateway by December 31 so that the deducted tax can remit directly to the government’s treasury.

 

Although offshore online gaming operators are not so mandated, they are however 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 the same directly to the government purse.

 

Executive Chairman, Muhammad Nami, disclosing this, urged full compliance by the online gaming community, 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.

 

“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 the government’s treasury.
The deployment of Sentinal National Payment Gateway is expected to simplify tax compliance for companies engaged in online gaming activities,” Oluwatobi Wojuola, media aide to the FIRS Chairman said in a statement.

 

Nami said the policy is adopted as the country needed to innovate and harness technology for improved revenue generation from e-commerce as well as for 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 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,” noted Nami who stated, “The system will also integrate with our own TaxPro Max portal.”

 

The Director General of the National Lottery Regulatory Commission of Nigeria, Lanre Gbajabiamila commended the adoption of this innovation, describing it as a “huge step” for taxation of the gaming industry.

 

“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 the 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,” Mr. Gbajabiamila noted.

 

David Kicks, the CEO of E-Technologies Global Limited, the proprietor of the Sentinal National Payment Gateway expressed excitement over the adoption of the system by the Service.

 

“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,” he said.

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