How New Tax Laws Impact Gaming Industry
L-R: Adenike Oyebamiji, Meshack Mutuku, Olajumoke Odudimu, and Jonathan Nwanze, at the recent Velex Advisory sponsored GTSA in Nairobi, Kenya
Jonathan Nwanze, Finance and Tax Manager at Velex Advisory, dissects Nigeria’s new tax laws and reveals how they will shape the gaming industry
Four new bills were recently signed into law on June 26, 2025. These laws are: the Nigeria Tax Act (NTA), the Nigeria Tax Administration Act (NTAA), the Nigeria Revenue Service Act (NRSA) and the Joint Revenue Board Act (JRBA). However, it is essential to highlight aspects that affect the gaming industry, including the lottery, casino, sports betting, and other games of chance.
Value-added tax
In line with the judgement, in the case of Tourist Company of Nigeria Plc Vs Federal Inland Revenue Service Appeal No. TAT/LZ/VAT/033/2018, value-added tax (VAT) of 7.5% applies to sport betting/casino, as gambling, a game of chance, is deemed a supply of service. The VAT Act describes “entertainment to include any exhibition and performance in which admission of people is subject to payment by such persons.” It further explains that “supply of services” means any service provided for a consideration.
Per VAT computation, it notes that the most rational thing is to allow the casino to deduct the total winnings paid out, from the total bets paid in, after which the VAT percentage is applied”, which may result in “either liability due from it or refund due to the casino”.
The new tax reform law now allows businesses providing services to claim input VAT, which was not previously allowed. Therefore, gaming/sport betting companies can now claim input VAT for services incurred and claim VAT refund where input exceeds output. This new position, explicitly enshrined in the new tax act, will benefit gaming companies where gaming revenue for a particular period is negative.
Personal Income Tax computation
The Nigeria Tax Act (NTA) allows for tax exemption for employees or individuals earning an income and gain of NGN 800,000 or less per annum. The new computation formula indicates increased rates for higher-income earners. Also, compensation for loss of employment or injury has an increased tax exemption threshold (N10 million to N50 million). Personal allowances and reliefs have been expunged from the law.
Corporate Income Tax and Exemption for Small Businesses
Businesses with a turnover of not more than N50 million and a total fixed asset of less than NGN 100 million are now categorised as small businesses and are exempt from Corporate Income Tax (CIT), Capital Gains Tax (CGT), and Development Levy. There is a reduction of CIT from 30% to 25% for larger companies.
Development levy and unification of other taxes
The new tax laws introduce a development levy of 4% on assessable profit (i.e., profit before tax, depreciation, and losses). This levy replaces the multiple taxes on assessable profit, such as the Tertiary Education Tax (TET) and the Police Trust Fund (PTF) levy. It unifies all levies into one, as a development levy.
Tax ombuds office
Independent body charged with the arbitration of complaints relating to taxes, levies and fees, etc. This body is established to monitor the activities of the Nigeria Revenue Service (NRS), formerly the Federal Inland Revenue Service (FIRS), and protect the rights of taxpayers.
These are some of the highlights that are noteworthy to operators and regulators in the gaming business: sports betting, casinos, lotteries, and other games of chance. The laws take effect at the start of 2026. The tax landscape continues to evolve, and it is important that betting businesses are compliant with the new tax laws.
