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Nigeria has confirmed that its incoming withholding tax regulations will come into force on January 1, 2025, which gambling businesses fear will be difficult to handle.

Earlier this year, a on the changes warned it may be “technologically and financially burdensome to implement a solution that is able to account for withholding tax on certain gaming operations (especially casino activities)”.

“Operators in the industry generally prefer for taxes to be imposed on their operations as opposed to players’ winnings. There is a risk that gaming and lottery companies could revisit their business models in order to be competitive against illegal or foreign operators (who do not comply with the regulations),” PwC said.

“Winnings from lottery, gaming, reality shows, etc,” will be subject to a 5 percent withholding tax for residents and a 15 percent tax for non-residents, according to an update  in the Nigerian Official Gazette dated October 2.

However, winnings from a game of chance or a reality show designed exclusively to promote entrepreneurship, academics and technological or scientific innovation will be exempt from the withholding tax.

The Deduction of Tax at Source (Withholding) Regulations 2024 were introduced on July 1.

Changes affecting certain gambling winnings were initially incorrectly billed to come into effect from October 1, 2024.

A KPMG  said "there are no significant changes" from the announcement in July, but the Federal Ministry of Finance has "added telephone charges, internet data, and airline tickets to the exemptions list."

The regulations will replace all existing regulations regarding deductions at source or withholding tax. 

Separately, Nigeria’s government plans to on gambling, however, this was declared as being delayed in an update released by the International Monetary Fund (IMF) on May 9.

Excises on telecommunications, lotteries and gambling are still “under consideration”, according to the IMF’s report.