BASIC FACTS ABOUT TAX ON WINNINGS OF POOLS BETTING, SPORT BETTING, LOTTERIES ETC
This is to inform the general public, especially owners and operators of casino, gaming centres, pools betting, sport betting, lotteries etc. on the need to deduct the mandatory 5% withholding tax at source on every winning.
All games of chance winnings are taxable in accordance with section 3(1) (a) of Personal Income Tax Act (PITA) 2011 as amended.
Winnings are generally taxed as ordinary income at both Federal and State levels.
Kogi State Internal Revenue Service (KGIRS) has the power to collect gaming tax on winnings in accordance with section 73 of PITA and section 24 of the Casino Law.
KGIRS also has the power to appoint agent (operators) for the deduction of tax at source in accordance with section 50 of PITA.
Operators of casino ,gaming centres, pools betting, sports betting and lotteries are required to withhold taxes at the rate of 5% from winnings in accordance with section 73 (2) (a) (b)& (5) of PITA.
Operators in this sector are expected to keep accurate records of all games of chance activities which include information such as the dates games of chance were played, the cost of tickets, agent’s commission and value of winnings in accordance with section 47 of PITA.
Every winner of Pools/Casino/Gaming/Lottery/Sport betting contest is eligible to pay tax on every winning regardless of whether the winning is in form of cash, tips or merchandise.
Winners of corporate raffle draws and promos are eligible to pay tax on winnings. The winning is in form of cash or merchandise.
Kogi State Internal Revenue Service is poised to begin full enforcement of the law, therefore all affected casinos, gaming, pools betting and lottery operators are hereby advised to comply with all the legal requirements and ensure prompt remittance of taxes collected in accordance with section 74, 76 & 104 of Personal Income Tax Act 2011 as amended.
Play your part, Pay your Tax.