Nigeria is on its way to updating its tax collection system, powered by UK-based Fintech company E-Technologies Global’s Sentinal product, generating tax from online gaming transactions. The news comes in tandem with a new remote operator permit for offshore-licensed operators, which will allow businesses to offer online gambling in Nigeria without a local presence.
The decision to broaden the country’s system was published in a statement by Johannes Oluwatobi Wojuola, the Special Assistant on Media & Communications to the Executive Chairman of the Federal Inland Revenue Service of Nigeria and made available to journalists on Wednesday.
E-Technologies’ Sentinal national payment gateway is 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. It provides governments with the ability to funnel all online transactions between end customers and e-commerce domestic and offshore merchants through one single payment portal.
Mohammad Nami, Executive chairman of the Federal Inland Revenue Service of Nigeria, said the new system was an important way to boost tax revenues at a time when this was a major priority for governments everywhere.
“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,” he added, and stated Nigeria needs to “innovate and harness technology” to ensure that online transactions are taxed and accounted for.
Nami also added that the FIRS has been “very impressed” with the Sentinal System, which allows not only to collect tax revenues at source, but also provides tax reporting and monitoring tools in real-time. The system will integrate with the Service’s TaxPro Max portal.
E-Technologies CEO David Kicks said the deal was “a major step” in the increased expansion of the regulated sector at the expense of gray markets. “This landmark deal will herald a new era in rapidly opening new regulated markets for responsible gaming operators, as gray market operating becomes increasingly problematic,” he stated.
The Nigerian government has faced revenue problems that have seen its budget deficit and debt rise. Nigeria’s debt stock increased to N 42.84 trillion by June, according to the Debt Management Office (DMO). In consequence, the government has been exploring options to expand its tax collection for more revenue.
The FIRS ordered all operators offering online gaming services in Nigeria to connect to the Sentinal system no later than December 31, 2022.
The notice said though it was not mandatory for online gaming operators offering online gaming services from outside Nigeria to be incorporated in the country, they are compelled by 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.
When it comes to the new Remote Operator Permit, companies will be eligible provided they already hold a license in another jurisdiction. This new license will allow operators to offer casino games, bingo, slots, sports betting and poker, with a validity of five years. Operators will pay an initial $100,000 to receive the approval, followed by fees of $50,000 in each of the next four years.
The Nigerian National Lottery Regulatory Commission will issue terms and conditions to which permit-holders must adhere to. Those who become holders of this new license will be allowed to offer their services in Nigeria and to advertise within the country in print media or via affiliate programmes.
Lanre Gbajabiamila
Lanre Gbajabiamila, director general of the National Lottery Regulatory Commission of Nigeria, said that the country would welcome any offshore operators that pass its screening process.
“Online gaming continues to grow rapidly in Nigeria, particularly on mobile, and the adoption of E-Technologies’ Sentinel National Payment Gateway is a huge step to allow us to capture gaming duty at source,” he stated.
He also added that all responsible offshore gaming operators are welcome to apply for a Remote Operator Permit, as long as they “pass all the relevant criteria including full AML screening and responsible gaming practices.”
Original article: https://www.yogonet.com/international/news/2022/10/31/64837-nigeria-updates-igaming-tax-collection-system-introduces-new-permits-for-offshorelicensed-companies
