The Lagos State Government has officially commenced the collection of a 5% Withholding Tax (WHT) on all gaming winnings. This implementation follows applicable Nigerian tax laws and specific regulatory directives aimed at the gaming industry.
The new tax applies to net winnings from all licensed gaming platforms operating within Lagos State. Operators must perform the deduction at the point of payout. All licensed gaming companies in Lagos have received directives to comply with this framework immediately.
How the Deduction Works
Under this new arrangement, 5% of qualifying winnings is automatically deducted before a player receives their payment. The operator then remits these funds to the Lagos State Internal Revenue Service (LIRS), which serves as the statutory tax authority.
This measure is part of a broader drive by the state to strengthen tax compliance and accountability. By bringing the rapidly expanding gaming sector under tighter scrutiny, the government aims to increase transparency across the industry.
Player Requirements and Tax Credits
To ensure compliance, players must now provide their National Identification Number (NIN) when collecting winnings. This requirement aligns with mandatory “Know Your Customer” (KYC) rules used to track financial transactions.
All deductions and remittances are handled by the licensed operators to ensure regulatory standards are met. While players will receive their winnings net of the 5% tax, the government has emphasized that proper records will be maintained for every transaction. Furthermore, the WHT deducted serves as a tax credit for the player, which can be utilized during their annual personal income tax filings.
Immediate Enforcement for Operators
The Lagos State Government has formally directed all licensed operators to begin these deductions with immediate effect. This move ensures that the gaming sector contributes fairly to the state’s internal revenue. Operators who fail to comply with the new remittance framework may face regulatory penalties from the LIRS.
