- The Lagos State Government has officially began to implement a five per cent withholding tax on winnings from licensed gaming platforms operating within the state
- The tax will be calculated on players’ net winnings and automatically deducted at the point of payout before funds are released
- The move is aimed at improving tax compliance and enhancing transparency in the rapidly expanding gaming industry
The Lagos State Government has commenced the enforcement of a five per cent withholding tax on winnings from licensed gaming platforms operating across the state.
This was disclosed in a public notice issued on Friday, February 20, by the Chief Executive Officer of the Lagos State Lotteries and Gaming Authority, Are Bashir.
According to the notice, the directive takes immediate effect and applies to players’ net winnings, which will now be taxed at the point of payout.
Bashir instructed all licensed gaming operators within Lagos to comply without delay, stating that the new framework aligns with existing Nigerian tax laws and regulatory guidelines governing the gaming industry.
The notice explained that the five per cent deduction will be automatically withheld before winnings are paid out to players. The deducted amount will then be remitted to the Lagos State Internal Revenue Service, the state’s statutory tax authority.
Bashir noted that the move forms part of broader efforts by the state government to boost tax compliance, accountability and transparency within the rapidly expanding gaming sector.
“The measure forms part of Lagos’ broader drive to strengthen tax compliance, transparency, and accountability in the rapidly expanding gaming sector,” the notice read.
Under the new arrangement, players will also be required to provide their National Identification Number (NIN) in compliance with Know Your Customer (KYC) regulations.
He clarified that all deductions and remittances will be processed strictly by licensed gaming operators in line with regulatory requirements. Players will receive their payouts after the statutory deduction, with proper documentation maintained to ensure transparency.
Bashir further explained that the withheld tax will count as a tax credit for players.
“All licensed gaming operators in Lagos State have now been formally directed to commence the deductions with immediate effect,” the notice said.
He reiterated that the policy is designed to strengthen regulation within the gaming industry while ensuring that both operators and players meet their existing tax obligations in Lagos State.