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FIRS, Commission To Automate Lottery Sector’s VAT Collection

The Federal Inland Revenue Service (FIRS) and the National Lottery Regulatory Commission (NLRC) have initiated processes for the automation of Value Added Tax (VAT) collection in the lottery and gaming businesses in the country.

The Head, Communications and Servicom Department of FIRS, Wahab Gbadamosi, in a statement quoted the Executive Chairman, Tunde Fowler, as making this disclosure during an interactive session with operators of lottery businesses in Lagos.

Fowler explained that the automation of VAT collection from all betting placements remained a lawful way of raising Nigeria’s revenue profile.

He recalled that the Service, in partnership with relevant stakeholders, had earlier automated VAT collection in some other sectors, adding that the successes recorded in those sectors would be replicated in the Lottery Industry.

The FIRS boss explained: “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 added.

The tax administrator maintained that the addition of 5 percent VAT would not discourage lottery businesses but would rather strengthen the businesses.

Commenting on the proposed automation processes, the Director-General of the NLRC, Lanre Gbajabiamila, said that the automation of VAT collection in the lottery businesses was a well thought out initiative which would work seamlessly for the benefit of the nation’s tax system.

According to him, the NLRC and the FIRS are working together to ensure that this automation process is seamless since the importance of taxation cannot be overemphasized.

He said: “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.”

The Chairman of Zurich Technology, the technical partner and software provider for the automation process in the lottery sector, Adeniyi Oyemade, assured lottery operators that the company had developed a software that will make the payment process seamless, efficient and transparent.

According to him, the automation software provided a transparent system that allowed the FIRS, the NLRC and Zurich Technology to have access to the payment portal and monitor all transactions.

Earlier in its presentation, the company had stated: “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”, it added.

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