Lagos Begins 5% Withholding Tax on Gaming Winnings

• The Lagos State Government has commenced a 5% withholding tax deduction on gaming winnings, mandating licensed operators to deduct and remit the tax at the point of payout.

The Lagos State Government has begun implementing a 5% Withholding Tax (WHT) on gaming winnings, in line with existing Nigerian tax laws and regulatory directives governing the gaming sector.

Under the new framework, the deduction applies to net winnings from licensed gaming platforms operating within Lagos State and will be made at the point of payout. All licensed gaming operators have been directed to comply immediately.

According to the directive, 5% of qualifying gaming winnings will be automatically deducted before payments are made to players and subsequently remitted to the Lagos State Internal Revenue Service (LIRS), the state’s statutory tax authority.

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The government said the move is part of broader efforts to improve tax compliance, transparency, and accountability within the rapidly growing gaming industry.

As part of the implementation, players are required to provide their National Identification Number (NIN) in line with Know Your Customer (KYC) regulations. Licensed operators will handle all deductions and remittances in accordance with regulatory requirements.

Players will receive their winnings after the statutory deduction, with proper records maintained to ensure transparency. The deducted WHT will also serve 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.