Nigeria's Tax Act 2025 removes VAT on gambling stakes
Nigeria’s government has exempted betting and lottery stakes from value-added tax (VAT) in a new law introduced in the country. This move is in the newly introduced Nigerian Tax Act 2025. President Bola Ahmed Tinubu signed this Act into law on 26 June 2025. This Act became effective on 1 January 2026.
The new development represents a significant change in Nigeria’s taxation system regarding betting and gaming. This development comes as a relief to all stakeholders involved, including gaming companies.
Legislative basis for exemption from VAT
Section 185, subsection (m) of the Act includes “money, stakes or securities, including interests in money or securities” as exempt from VAT. The law defines a stake as the sum staked on a game.
This exemption is applicable to all gaming products that are in operation in the Nigerian market. These products include online slots games, sports betting games, video poker games, and lotteries that are event-driven or event-related.
Rationale of the policy for the reform
According to Taiwo Oyedele, the chairman of the Presidential Committee for Fiscal Policy and Tax Reforms, the policy aims at taxing profits and not daily money transactions.
This principle guides the zero-rating of stakes. It conforms to the VAT standard in many countries. Most countries regard gambling stakes as transfers of funds rather than services subject to VAT.
Resolving past disputes
Betting was previously considered a taxable service by certain tax authorities. VAT was charged on the actual stakes placed by the players. This charge led to conflicts between the regulatory authorities and the gaming companies.
There were a number of disputes that gave rise to court cases. The Nigerian Tax Act of 2025 has clarified the matter by explicitly stating that stakes are exempt from VAT. This exemption has reduced disputes in the area of compliance.
Compliance requirements for operators
Operators must update their payment systems immediately. Their accounting processes must incorporate the new treatment of wagers in VAT. Firms must not charge VAT on stakes paid by players. Firms must process transactions correctly.
However, this exemption does not apply to all revenue streams. Businesses can continue charging the mandatory 7.5 percent VAT rate for other services. Such services include platform fees, service fees, commissions, subscriptions, or adverts.
Industry reactions and expert views
Industry experts have welcomed the clarity that has been brought in by this Act. Toheeb Yusuf of EY also offered insights on the implications of the exemption of VAT. In his observation, the question that was previously unclear was: “Should VAT apply to betting and gaming stakes?” The Act has, however, provided a clear answer. A stake refers to the amount of money bet on a game. It is the amount of money a player puts down to play or bet. This issue is dealt with by the Nigerian Tax Act 2025. Under section 185(m), stakes are specifically exempted from VAT.
Practical implications for the industry
Charges for VAT should not be applied to the number of stakes received from customers. The amount staked by customers should not attract VAT from gaming or betting firms. VAT can, however, be applicable to commissions, service fees, subscriptions, or adverts. The stake is entirely exempt.
Why the exemption matters
VAT is a tax on consumption rather than a tax on gambling risk. The exemption supports good tax policy. It also provides a degree of certainty for operators, regulators, and tax planners. The Nigerian Tax Act 2025 provides a definitive answer to VAT treatment in relation to gambling activities. The exemption of stakes in this law puts an end to a conflict in practice and brings Nigeria into line with international standards.
Don’t just read the news — stay ahead of it. Subscribe HERE to SiGMA’s Top 10 News countdown for stories shaping iGaming’s future, weekly insights from the world’s biggest iGaming community, and exclusive subscriber-only offers.
