The Lagos state government has begun enforcing a five per cent withholding tax on earnings from gaming activities, aligning the move with existing national tax regulations and industry guidelines.
Under the directive, the deduction applies to net winnings paid out by licensed gaming companies operating in Lagos. The tax is to be removed at the point of payment before players receive their funds.
Authorities confirmed that all approved operators have been instructed to immediately activate the deduction system and ensure that the collected sums are transferred to the Lagos State Internal Revenue Service, the agency responsible for tax administration in the state.
The government explained that the policy is part of efforts to improve revenue collection standards, boost compliance, and enhance transparency within the fast-growing gaming industry.
As part of compliance requirements, players must provide their national identification number, NIN, in line with know your customer, KYC, regulations. Licensed operators are responsible for deducting and remitting the tax in accordance with established rules.
Winnings will be paid out after the statutory five per cent deduction, with operators required to maintain accurate documentation. The withheld amount will count as a tax credit for the beneficiary.
All gaming firms licensed to operate within Lagos have been formally notified to begin implementation without delay.
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