Okwe Obi, Abuja
The Federal Government’s effort to shore up more revenue to finance the economy, service debt and create employment opportunities by lifting 100 million Nigerians out of poverty, is being weakened by a loophole recently uncovered by the lottery scheme operators due to the non-remittance of accurate Value Added Tax (VAT) for over 13 years.
According to the Minister of Special Duties and Intergovernmental Affairs, Senator George Akume, only N9.8 million had been remiited by operators from 2007 to 2019 when they are expected to pay 20 per cent income. He added that what they owe, runs into billions of naira.
As it is, Nigeria has over 30 of such schemes. Some of them are; BetNiaja, Plenty Million, Global Lottery, Pay Day, CloudBet, Sportybet, Betgames, Betway, Wesco, Fortune bet, Green Lotto, Access Bet, Niaja Lotto, Naira Bet, Bet Kings Afretbet, People Empowerment Lotto.
And the National Lottery Act of 2005 paragraph 25 (1) states that: “A licensee shall submit to the President and the Commission, at such time and in such manner as the Commission may, from time to time prescribe, financial statements, returns and other records relating to the lotteries operated pursuant to the license.
“A license shall keep proper accounts and records of the transaction s and affairs of the licensee sufficient to explain the financial operations and financial position of the licensee.”
The Act gives leeway for operators to apply to the President, through the commission, for an extension of time within which to submit financial statements. But added that “A licensee shall prepare and submit to the Commission not later than 30th June in each year to report in such form as the President or the Commission may direct on the activities of the licensee during the immediately preceding year.”
Akume insisted that what they owe should be remitted as soon as possible to avoid embarrassment and not used as experimental guinea pigs.
“Give to Caesar what belongs to Caesar. Outstanding monies are running into hundreds of billions from 2007 to 2019.
“I want you to pay up what you are owing the government of the federation. It is very important that you cooperate. The necessary documentations have been prepared and will be transmitted to the relevant agencies to tract and recover these monies. I do not think it is in the best interest if we wait for people to knock an our doors at midnight. It is not right.
For thirteen years, you have remitted only N9.8 million. And this is something that some of you make in two weeks.
“Yes, there is no central monetary system but if we are patriotic enough we should be able to do what we are supposed to do. In the western world like America and Europe, they do not joke with matters of taxes. You are making a lot of money but nothing is coming to government. When we see this document, we wonder whether this thing is coming from the state with 2, 000 people,” he said.
He noted that the industry had grown from the backyard to what it is today. “From a very humble beginning but today you have an industry that can stand on its own in many part of Africa. We are not there yet but we will get there. There is need for innovation. Because if you do not innovate you will run out of business.”
He pointed out that with constant remittances as at when due it would be easy for the Federal Government to lift over 100 million Nigerians out of poverty.
“We have shared goals which involves working for the benefits of the entire country and in line with with the policy of the Federal Government to lift over 100 million Nigerians out of poverty. The industry is a huge one regardless of the imperfections which we have observed and deliberately created by some practitioners.”
While government is lashing at operators, they are also defending themselves, saying they are multi-taxed by the three tiers of government on a monthly bases, which Akume maintained that, Federal Law supersedes, putting the operators are in the middle of the snag.
The General Manager, Lottery Operation and the Chief Executive Officer of Western Lotto, Abayomi Ogunfowora, operators lamented that: “I have problem with double taxation. The double taxation has different faces; the States and federal are taxing us using the same name. You can not operate without obtaining license from a state even when you got license from federal government. Aside that, there is a federal inland tax and as a lottery company you do not have that margin.
“When you comply with all of these you will be in negative. You can not survive it and that is why operators are finding ways to remain in business which are more confidential. There are things that need to be tabled and resolved by the appropriate authority. The 20 per cent is not too much. The regulatory body regulation is perfect in terms of taxes.
“The commission says pay 24.5 per cent of your profit and not your gross. After you must have paid winners, cost of sales which is the commission. If you make the commission know that you pay some other bills, it will understand with you. If the bills are genuine they might look it to. And if you don’t have profit in that month all you need to do is to report so long as there is transparency. But this is not the case at this time.
What I am advocating is that there should be transparency. Everyone has a lot to share. Before have taken advantage of the game and they do not pay royale to the owner of the game. 70 per cent of the transaction come in from this game except the person wants to deceive you.”
Also, Chairman, Lottory Operators Forum, Chima Onwuka, added that though the industry is a money-spinner, many lottery investors had shut down their operations due to the hordes of illegal operators.
According to him, in 2016 the lottery industry is worth an estimated $70 billion, revealing that Nigerians dole out approximately N154 billion on betting and lottery.
Onwuka stated that many lottery investors had decided to forego their N50 million lottery license due to the unfavourable business climate in the country.
“Many lottery operators have shut down on account of the unfavourable business climate in the country. A friend told me that the worst N50m he spent was spent on a lottery licence. Today, he has shut down the business and thrown in the towel. We need to find a way to reach the government, the regulator, and the betting public to evolve a win-win situation.”
The financial experts say the problem of unremitted taxes will continue to hurt the economy until a solid monitory system is put in place. And the laws are strengthened and enforce to address persecute illegal operators who do not pay royalties to owners.
A senior official in the Commission who spoke on condition of anonymity cast doubt on the possibility for government to set up a sophisticated monitoring system any time soon, explaining that weaving different agencies together to embark on it would take time.
According to the source: “I cannot say whether they are defrauding government because what we are doing is what we see in the papers.”