As Nigeria prepares for the lofty ambition of becoming a completely cashless society, the Federal Inland Revenue Service of Nigeria (FIRS) has inked an agreement with Great Britain’s E-Technologies Global Limited to bring its revenue tracking and tax collections into the post-modern age.
Nigeria is also inviting “tier-1” online gambling operators that comply with anti-money-laundering (AML) and responsible gambling protocols to apply for a Remote Operator Permit and provide monitored gambling services in Nigeria.
The E-Technologies agreement is key to the government’s plans to move forward and is the first public/private partnership of its kind to encompass transaction monitoring, tax collection at the point of sale, and to provide tools for regulators to enforce tax laws..
E-Tech’s Sentinal National Payment Gateway builds on earlier Fintech but in a first for the gambling industry, the system requires integrated payment service providers to deduct taxes at the point of consumption or transaction and tender the tax funds to the government in real-time as the transaction occurs.
Earlier deployments of similar systems include Estonia’s ERPLY, a real-time Point-of-Sale (POS) and retail software management system that automates all elements in a single system including point-of-sale transaction, back office, inventory management, accounting, employee payroll, customer CRM, and multi-channel/e-commerce.
According to ERPLY, “Just Four years after the introduction of [GOV POS]
regime as a tool for revenue enhancement in Tanzania, we have witnessed a growth of about 73% in VAT revenue collections.”
FIRS has ordered all operators that offer online gaming services to players in Nigeria to connect to the Sentinal system by December 31, 2022.
In a pitch to operators, the government noted that the new system will allow them to offer services in the country without the need to incorporate there in order to offer legitimate services to residents.
Once an operator is connected to the Sentinal system, gaming duties will be deducted as the players deposit and the duty will be remitted in real-time directly to the government.
Director General of the National Lottery Regulatory Commission of Nigeria, Mr. Lanre Gbajabiamila said that adopting the system was a “huge step” for taxation of the gaming industry.
“Online gaming continues to grow rapidly in Nigeria, particularly on mobile, and the adoption of E-technologies’ Sentinal National Payment Gateway is a huge step for us to allow us to capture gaming duty at the source.
“We are welcoming all responsible offshore gaming operators to apply for a Remote Operator Permit as long as they pass all the relevant criteria including full AML screening and responsible gaming practices. We are proud to be the first country to adopt the Sentinal System and we believe it will bring a real national benefit to Nigeria,” the lottery director noted.
CEO of E-Technologies Global Limited, David Kicks commented: “Governments in rapidly developing nations are struggling to keep pace with the evolution of eCommerce and the ascent of mobile transactions.
“We are thrilled that the Nigerian Government has made the decision to integrate our Sentinal 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,” Kicks said.
The Central Bank of Nigeria, CBN, stated on October 26 that it would take “decisive steps” to ensure that Nigeria operated a 100 percent cashless economy.
CBN Governor, Godwin Emefiele made the comment on the first anniversary of the Central Bank’s Digital Currency, the eNaira.
“The destination as far as I am concerned is to achieve a 100 percent cashless economy in Nigeria.”
Emefiele said that the eNaira central bank digital currency had recorded over eight billion transactions and that Nigerians can expect to see added functionalities in the cashless currency in the coming months.
Emefiele said: “The additional functionalities include onboarding of revenue collection agencies to increase and simplify collections.”
Source: Nigeria adopts pioneering system to collect taxes directly and in ‘real time’ from online transactions, EU Gaming News, October 31, 2022