Lottery, betting operators kick as FIRS automate VAT collection

The Federal Inland Revenue Service on Monday announced plans to
automate collection of Value Added Tax from operators in the
nation’s lottery and gaming industry.

The Chairman, FIRS, Mr Babatunde Fowler, disclosed this in Lagos
at a stakeholders’ meeting organised in conjunction with the
National Lottery Regulatory Commission with lottery and gaming
operators.

He said in his welcome address that the automation would enable
lottery players and bettors to pay VAT on each transaction
made.

“What we are trying to introduce today is aimed at improving the
transparency, accountability and convenience in the payment of any
taxes. We are automating tax collection in across various
industries in the country,” he added

The Director-General, NLRC, Mr Lanre Gbajabiamila, said the
importance of strict adherence to tax laws could not be
over-emphasised in view of Nigeria’s present economic
challenges.

“In the gaming industry, products and services are generally
offered through agents who are commonly in direct contact with the
players. The consumption of the products and services are taxable
under the law,” he said.

Industry operators, however, voiced concerns over the VAT on
lottery and gaming services, saying it would hurt their
businesses.

The founder of NairaBET, Mr Akin Alabi, who spoke on behalf of
lottery and gaming operators, faulted the mode of charging the VAT,
saying it would drive customers away from operators’ platforms.

He said, “There must be another mode of collecting VAT rather
than from the top level, which is on every stake. Telling operators
to pay from the stakes is almost impossible because what it means
is that customers will leave our platforms. So, they will start
looking for companies that are not regulated where they can place
their bets; they will look for foreign companies. So, it is going
to ruin our business.

“Presently, I have little to lose. I am in the process of
divesting all my interests in NairaBET because I just won election
to the House of Representatives. But I don’t want to leave the
industry in a mess; that is why I am passionate about it.”

Alabi stated that the FIRS should have consulted operators
before taking the decision to impose VAT and automate its
collection.

Responding, the FIRS boss, said, “Tax has to do with law and the
law says that for every transaction that is VATable, 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 bettors.

“If you carry out foreign bets and you go through your banks to
make the payment, you will also be charged VAT.”

Fowler, while fielding questions from journalists on the
sidelines of the event, said, “If somebody comes to bet N100, it
becomes N105. I can assure you that it will not make them change
their minds.”