The Federal Inland Revenue Service (FIRS) and the National Lottery Regulatory Commission (NLRC) have started processes to automate the collection of Value Added Tax (VAT) in the lottery and gaming businesses in Nigeria.
At an interactive session with operators of lottery businesses in Lagos on Monday, the Executive Chairman of FIRS, Tunde Fowler said the automation of collection of VAT from all betting placements is a lawful way of raising the country’s revenue profile to enable the government function optimally.
Fowler said the FIRS in partnership with relevant stakeholders had earlier automated VAT collection in some other sectors such as Aviation and stated that the successes recorded in those sectors would be replicated in the Lottery Industry.
“Tax has to do with the law. What we are doing is to find a way to make tax collection seamless, convenient and efficient. We are automating VAT across various industries in the country. What we are doing with the gaming industry is not strange. This automation is not intended to harm the industries, rather it is meant to improve the lives of everyone because VAT revenue is shared among the three tiers of government and it is used to provide social amenities and make life better for everyone. So, at the end, all of us win“, Fowler said.
Fowler said that the addition of 5 percent VAT would not discourage Lottery businesses but would rather strengthen them.
“Let us think of what we can do for this country. The 5 per cent VAT will not harm the Lottery businesses”, he said.
The Director-General of the NLRC, Lanre Gbajabiamila noted that the automation of VAT collection in the lottery businesses is a well thought out initiative which would work seamlessly.
“The NLRC and the FIRS are working together to ensure that this automation process is seamless. The importance of taxation cannot be overemphasized. VAT is essentially a consumption tax. In the gaming industry, lottery agents fail to collect VAT thereby causing loss of revenue to the government. Lottery is taxable and we have to comply with the law. Therefore, thinking out a way to solve this problem is a welcome development. The NLRC is not going to sit down and watch the lotto businesses in this country fold up. We will work together to ensure that they succeed.
Technical partner and software provider for the automation process in the lottery sector, Zurich Technology assured Lottery operators that it has developed a software that will make the payment process seamless, efficient and transparent.
Chairman of Zurich Technology, Adeniyi Oyemade said the automation software provides a transparent system that allows the FIRS, the NLRC and Zurich Technology to have access to the payment portal and monitor all transactions.
In their presentation, Zurich Technology said: “Now, the VAT component is added to the original cost of betting which the consumer will pay for. The software automatically calculates the VAT component of all transactions within a 21-day period and gives a bill to the Lottery Operator which the Operator will pay to the FIRS”.