The Federal Inland Revenue Service (FIRS) revealed that it has partnered with a Fintech platform, e-Technologies Global Ltd.’s Sentinal National Payment Gateway to automate the administration of taxes on online gaming.
This was disclosed by the agency’s executive chairman, said in an emailed statement made available to Innovation Village. The Chairman noted that the platform will “not only collect tax revenues at source, but also provide us with tax-reporting and monitoring tools in real time.
“Sentinel National Payment Gateway is a transaction processing system that enables Integrated Payment Service Providers to deduct taxes at transaction points and remit the tax deducted directly to government’s treasury.
“The deployment of Sentinel National Payment Gateway will simplify tax compliance for companies engaged in online gaming activities.”
All operators offering online gaming services are required to connect to the Sentinel National Payment Gateway not later than December 31, 2022. The operators are to deduct tax from online gaming transactions — and remit directly to the relevant government treasury.
“Though it is not mandatory for online gaming operators offering online gaming services from outside Nigeria to be incorporated in Nigeria, they are compelled by extant tax laws to connect to the Sentinel National Payment Gateway to dedicate tax from the gaming transactions of players in Nigeria, and remitting same directly to the government purse,” the agency said.
“The world is entering a challenging time where there is a strong obligation on governments to increase tax revenue as a percentage of GDP so as to provide much-needed funding for local infrastructure and public services. Nigeria needs to innovate and harness technology to ensure that online transactions are taxed and accounted for.”
“We have been very impressed with the Sentinel platform which allows us to not only collect tax revenues at source but also provides us with tax reporting and monitoring tools in real-time.
In response, David Kicks, chief executive officer, E-Technologies Global Limited, proprietors of the Sentinel National Payment Gateway, expressed his excitement over the adoption of the system by the FIRS.
“Governments in rapidly developing nations are struggling to keep pace with the evolution of eCommerce and the ascent of mobile transactions,” Kicks said.
“We are thrilled that the Nigerian Government has made the decision to integrate our Sentinel System, which empowers them to streamline online taxation. By understanding better how the payments ecosystem behaves and evolves, we can drive a paradigm shift towards a point of consumption tax methodology.”
