• LIRS is testing whether money paid to creators through platforms such as Selar is a royalty. That classification could require a platform to withhold 5% before paying an ebook or course seller.
• Nothing has been finally decided. LIRS told TechCabal that the Selar matter is still an open verification and reconciliation exercise, with any formal assessment subject to objection and appeal.
• A withholding is not automatically a second tax. LIRS says it would be an advance collection against a creator’s eventual income-tax bill, but the deduction could still tighten cash flow for smaller sellers.
The tax row around Selar starts with a small number that can feel very big when it touches a payout. If 5% were withheld from a ₦100,000 creator payment, the amount held back would be ₦5,000. For someone selling one course, one template or a handful of ebooks at a time, that is not an abstract policy argument. It is money that does not land in the account today.
That is the concern behind the public disagreement between Selar and the Lagos State Internal Revenue Service, or LIRS. The dispute is not about whether creators should pay tax in some broad, moral sense. It is about the legal label attached to a digital sale, who should collect any tax first and what happens when a platform is asked to do the collecting.
The argument begins with one word
When someone buys a course or ebook, it can look like a simple sale: a buyer pays, a creator gets paid, and Selar helps move the money. LIRS is testing a different description. The agency told TechCabal that a payment for digital content may count as consideration for using a creator’s intellectual property. In that reading, it could be a royalty.
That one word matters because royalties can trigger withholding tax. LIRS’ position, as reported by TechCabal, is that a creator platform that facilitates payouts could have to deduct 5% before the money reaches the creator and remit it to the tax authority.
Selar disagrees. The company told TechCabal that it sees its role as providing storefronts, payment integration and delivery tools for a commission, not paying creators royalties. Its public Terms of Service add a layer to the argument: creators retain rights in their content while granting Selar a licence to use, display, reproduce and distribute it through the service. That is not a final legal answer on its own. It is the contract language both sides are now looking at differently.
What a 5% withholding actually means
The quickest misunderstanding is to call a withholding a brand-new tax on every creator. That is not how LIRS describes it. The agency says the 5% would be collected early and credited against the creator’s eventual income-tax obligation.
In plain terms, a generic ₦100,000 payout could become ₦95,000 in cash at the point of payment, with ₦5,000 remitted and recorded as a tax credit. Whether that credit fully matches what a particular creator eventually owes depends on their total income, reliefs, records and formal tax process. This is a developing public dispute, not a personal tax calculation or instruction for any reader.
The logic is easy enough to understand from the state’s side. It is far easier to reach one payout platform than thousands of individual sellers. Nigeria has seen a version of that argument before: the Federal High Court upheld the tax authority’s power to appoint a digital platform as a VAT collection agent in the earlier Bolt case. But that case concerned VAT and ride-hailing/food delivery. It does not settle Selar’s royalty question.
Small creators feel the cash-flow question first
The legal argument may be about intellectual-property licensing. The human argument is about timing.
A creator who gets paid after a corporate workshop or sells hundreds of course seats may be able to treat a deduction as an early part-payment. The person selling a ₦3,000 workbook, a monthly design template or an online class is more likely to feel the difference immediately. Small creator businesses often use a payout to fund ads, data, production, dispatch or the next batch of content.
That is why the Selar row has travelled beyond tax professionals. It asks whether a rule designed to collect tax efficiently can distinguish between a high-earning digital business and a small seller whose revenue is irregular and thin. The Nigeria Tax Act 2025 is the legal backdrop, but the hard part is how a modern creator transaction is classified in practice.
Nothing has been finally decided
This is the line creators need to keep in view. LIRS told TechCabal that the exercise is still open and that any formal assessment would come through the statutory process, with rights to object and appeal. Selar’s CEO Douglas Kendyson has said the company is engaging with the agency; the platform has not said that every creator payout is already being cut by 5%.
So the story is not “all Nigerian creators have a new tax.” It is that a live dispute is testing an important question: when people sell their knowledge online, is the platform merely moving a sale—or is it paying for a licence to use their work?
The answer will shape more than Selar. It could affect how platforms, creators and tax authorities understand the growing business of selling a Nigerian idea to the internet.
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Do you sell courses, ebooks or templates online? Would a smaller payout today change how you run your work? Tell us in the comments.
