Recently the Federal Inland Revenue Service (FIRS) released a public notice on real-time direct collection of taxes from online gaming transactions. FIRS has an automated tax collection process for online gaming businesses, whether local or foreign. Taxes will be deducted at transaction points from online gaming transactions using the Sentinal National Payment Gateway and Electronic Solution. Sentinal National Payment Gateway (Sentinal Gateway) is a transaction processing system that enables Integrated Payment Service Providers to deduct taxes and remit the amount deducted straight to the government.
The automated platform for payment will make it easier for online gaming businesses to comply with Nigerian tax laws. Hence, every provider of online gaming services in Nigeria must connect to the Sentinal Gateway by 31st December 2022.
Although it is optional for a foreign company that renders online gaming services in Nigeria to register as a legal entity in Nigeria, the offshore company must connect to the new payment platform to deduct tax from gaming transactions of players in Nigeria and remit to the revenue authority. All online gaming companies should take note of this public notice for compliance. FIRS expects full compliance, as there are penalties for non-compliance.
FIRS contacts for the automation of tax collection on online gaming transactions are via e-mail to [email protected] or [email protected]. The mailing address is Office of the Executive Chairman, Federal Inland Revenue Service, No 15 Sokode Crescent, Wuse Zone 5, Abuja.