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FIRS plans to impose VAT on sports betting resisted by stakeholders
4th March, 19:25- The sports betting industry in Nigeria has been rife with the news of an impending new tax regime
- There are rumours that the FIRS had concluded plans to introduce the 7.5% value-added tax to betting activities within the country
- Operators in the sector have vehemently kicked against the plan by the FIRS
The alleged plans by the Federal Inland Revenue Service (FIRS) had to introduce 7.5% Value Added Tax (VAT) to betting activities within the country has been rejected by operators in the sector.
Under the proposed plan, punters placing a bet of N1,000 would have had to pay N1,075 to capture the 7.5% VAT.
The news had sent the industry into panic as the economic realities of the country continue to affect the revenue of businesses in various sectors.
A stakeholders meeting where representatives of sports betting companies and operators met to present their arguments was recently held.
Under their umbrella body (Association of Nigerian Bookmakers), sports betting operators made a presentation on the impracticability of the introduction of a 7.5% VAT on sports betting.
The betting operators cited examples when people bet about N100,000 to win N105,000 and wondered how practical that would be if the punter had to pay N7,500 VAT to get winnings of N5,000.
Speaking at the stakeholders meeting which was held late last month at the National Assembly quarters in Abuja, Director General of the National Lottery Commission Mr Lanre Gbajabiamila agreed that it was impracticable to impose VAT on betting stakes.
He advised the FIRS to instead explore the possibility of charging VAT on winnings before they are paid out to punters.
A representative of the FIRS at the meeting, Pam Davou, said he appreciated the views raised and suggested a continuous discussion between operators and FIRS to find a feasible solution.
Already, commercial banks, malls, stores, telecommunication companies, and government agencies have notified their customers of the new government policy.
The new VAT rate is expected to shore up federal government revenue and it is expected to fund health and education sectors as well as infrastructure projects.
The federal government had in September 2019, announced plans to review the VAT through consultations at various levels in the country.
The minister of finance, budget and national planning, Zainab Ahmed, made this known to journalists at the State House after the Federal Executive Council meeting on Wednesday, September 11.