Lottery, Betting Firms Now to Pay VAT


Nume Ekeghe

The Federal Inland Revenue Service (FIRS) yesterday said soon betting and lottery centres in the country would be made to charge Value Added Tax (VAT).

The VAT payment would also be extended to automated collections.

This was announced in Lagos at a stakeholders’ engagement session with lottery and gaming operators.

The session, organised by the FIRS in conjunction with the National Regulatory Commission (NLRC), had in attendance top officials of revenue collection agencies led by the FIRS Chairman, Mr. Tunde Fowler; NLRC Director-General, Mr. Lanre Gbajabiamila; representative of the Senate Committee on Sports, representative of the Chairman, House Committee on Governmental Affairs, and industry operators.

The move would will see users of the services provided by firms in the aforementioned sector paying five per cent VAT on each transaction made.

Speaking at the forum, the FIRS chairman said VAT is not a tax to be borne by operators, but their customers.

“Tax has to do with law, and the law says that for every transaction that is subjected to VAT, five per cent should be charged. You have to be aware that we are automating collection in all industries.

“This is not a tax on the business, but on the bettor who hopes to win. You also have to realise that 85 per cent of VAT goes to the state, which are supposed to be closer to us. In this case, we are all winners,” the FIRS boss said.

According to Fowler, additional revenue from VAT would aid provision of better social economic infrastructure for the country.

He explained: “And I think that based on the understanding with the stakeholders, we are moving in the right direction, and the payment of tax would be more convenient, transparent and accountable to all Nigerians, and of course that would empower especially the state governments who get 85 per cent of VAT to do more for everyone.

“This is an inclusive government, and it also means it should be inclusive when it comes to paying taxes.”

On his part, the DG, NLRC alleged that lottery and gaming operators collect VAT from customers without remitting same to the government, a situation he state resulted in revenue losses.

Also, participants at the forum pointed out that betting slips issued to consumers do not indicate VAT as they should.

Meanwhile, a presentation was made at the forum by Zurich Technologies, provider of the automated software solution for VAT collection.

The process was done electronically in a way that computes the VAT payable by consumers on each operator’s platform by aggregating transactions for a 21-day period and the operator is given a bill for the VAT payable.

However, industry operators at the meeting argued that automation has the potential of killing the industry, saying the five per cent VAT would discourage customers from patronising their services.

Speaking on behalf of lottery and gaming operators, founder of Nairabet and House of Representatives member-elect, Mr. Akin Alabi, said the potential reduction in hoped-for winnings, especially on low-odds bets, would drive customers from regulated operators into the hands of unregulated ones.

He argued that the FIRS should have consulted operators before taking the decision to impose VAT and the automation of collection.