FIRS readies new automation for VAT charge on lottery, betting

•Operators kick, allege poor consultations

The Federal Government, yesterday, in Lagos, engaged the lottery and gaming operators, as it unveiled an automation collection process that would be used to charge Value Added Tax (VAT) on lottery and gaming activities.This is coming against the backdrop of government’s increased efforts to raise its non-oil revenue profile, a development that has been seen as “hunting without barriers”.

The forum, organised by the Federal Inland Revenue Service (FIRS) in conjunction with the National Regulatory Commission (NLRC), had the FIRS Chairman, Tunde Fowler, assure the sector operators that every concern would be addressed and transparently.The operators had argued that the VAT and its automation has the potential of killing the industry, as the additional five per cent charge could discourage punters from using their services as frequency as they currently do. The founder of Nairabet and House of Representatives member-elect, Akin Alabi, said the potential reduction in hoped-for winnings, especially on low-odds bets, will drive customers from regulated operators into the hands of unregulated ones.

According to him, FIRS should have consulted operators before taking the decision to impose five per cent VAT and the automation of collection.Responding, Fowler said that the tax burden is to be borne the customers, not by the operators, adding: “Tax has to do with law and the law says that for every transaction that is ‘VATable’, five per cent should be charged. You have to be aware that we are automating collection in all industries.

“This is not a tax on the business, but on a bettor, who hopes to win. You also have to realise that 85 per cent of VAT goes to the state, which are supposed to be closer to us. In this case, we are all winners.”Also at the event were the Director-General of NLRC, Lanre Gbajabiamila; the representatives of the Senate Committee Chairman on Sports; the Chairman, House Committee on Governmental Affairs; and industry operators.

Speaking at the session, Gbajabiamila stated that lottery and gaming operators collect VAT from users of the industry’s services without remitting such to the government, a situation that results in revenue losses.He also noted that betting slips issued to consumers do not indicate VAT as they should.

In a presentation made by Zurich Technologies, the provider of the software for the VAT collection, the process will be made electronically, computing the VAT payable by consumers on each operator’s platform by aggregating transactions for a 21-day period, while the operator is given a bill for the VAT payable.

The bill is then settled through the online platform, as the software allows operators to file VAT returns and flexible enough to accommodate disputes over figures, which operators can resolve with the FIRS through the provision of documents to back such claims.Zurich Technologies explained that automation would improve transparency in the collection process.