NairaBET, Lottery Operators Kick Against VAT Automation

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  • NairaBET, Lottery Operators Kick Against VAT Automation

Operators in the nation’s lottery and gaming industry kicked against government plans to automate the collection of Value Added Tax (VAT) from customers.

The Chairman of the Federal Inland Revenue Service (FIRS), Mr. Babatunde Fowler, made the announcement in Lagos at a stakeholders’ meeting organised in conjunction with the National Lottery Regulatory Commission (NLRC).

According to the Chairman of the service, the automation would ease the stress associated with VAT payment and 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 across various industries in the country,” he stated.

Mr Lanre Gbajabiamila, the Director-General, NLRC, said the importance of tax to the Nigerian economy cannot be over-emphasised, especially with the ongoing revenue 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.

Operators in the industry, however, voiced their concerns over additional fee on lottery tickets and other gaming services, according to them it would hurt their businesses.

Mr Akin Alabi, the Founder of NairaBET, Mr Akin Alabi, who spoke on behalf of the industry, said the mode of charging would chase customers from local platforms to foreign companies.

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 further stated that FIRS should have consulted operators before automating its collection and imposing VAT on customers.

Responding to operators, the FIRS boss, said, “Tax has to do with law and the law says that for every transaction that is VATable, five percent 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 responding to questions from journalists, said, “If somebody comes to bet N100, it becomes N105. I can assure you that it will not make them change their minds.”

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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