Налоговая служба Нигерии требует от платформы Selar удерживать 5% налогов с выплат создателям контента

On July 15, Douglas Kendyson, the founder and chief executive of creator economy startup Selar, accused the Lagos State Internal Revenue Service (LIRS) of “hounding” his company over a backdated 5% royalty fee on all sales processed through the platform. In an emailed statement to TechCabal, LIRS said its position rests on how those transactions are structured: when someone buys an ebook or a course on Selar, they are paying to access a creator’s copyrighted work. Payment “may constitute consideration for the use of, or the right to use, the creator’s intellectual property,” the agency said in the statement signed by Monsurat Amasa-Oyelude, its head of corporate communications. LIRS is testing whether payments for digital content are royalties rather than sales, a distinction that could require creator platforms to withhold 5% before paying creators. “Where royalty is paid to an individual, resident or non-resident, the applicable withholding tax rate under the WHT Regulations is 5%,” the statement read. The agency sees the transaction as a licence to use the work, not an outright sale. “The relevant right is the creator’s intellectual property right, which is licenced by the creator to the purchaser, enabling the purchaser to access or use the digital content,” the statement read. If a withholding obligation exists, someone has to do the withholding. The law places that duty on whoever makes or facilitates the payment. Creator economy startups like Selar, Mainstack, and Nestuge handle the money, so LIRS wants them to deduct the 5% at payout and remit it. The reason is that 400,000 creators are hard to reach, but one platform is not. On July 17, two days after his viral tweet, Kendyson disclosed that he had met informally with LIRS officials. He said some lines “could’ve gotten crossed,” and a formal meeting has been scheduled where both sides will work through how Nigeria’s new tax laws apply to creators. LIRS confirmed the July 17 meeting but characterised it differently. The agency said the engagement was part of an ongoing exercise to reconcile outstanding records and clarify the statutory basis of its position, rather than to work through how the law applies to creators. “The matter remains an open verification and reconciliation exercise,” the agency’s statement read. “Should the exercise ultimately establish a withholding tax liability, LIRS will issue a formal assessment through the statutory process with the attendant rights of objection and appeal before any liability becomes final and enforceable.” That sequencing raises an obvious question: if a formal assessment comes only after the meetings, why were the platforms not approached before any liability had been established? LIRS said this order is correct because the duty to withhold is “self-executing and does not depend on a prior notice, reminder, directive, or appointment by LIRS.” The agency also confirmed that Selar is not alone and it is conducting compliance verifications “across digital economy platforms that process payment distributions to individual content creators,” adding that it is taking statutory action against Mainstack, another creator economy startup. “With respect to Mainstack, the Service exercised its statutory powers under Section 67 of the NTAA, 2025, following the company’s failure to respond to official communications,” LIRS’ statement read. “However, upon receipt of Mainstack’s formal objection on Monday, 27 July 2026, the Service will invite the company to a statutory reconciliation meeting per the provisions of the Act.” Mainstack declined to comment on any part of this article. What 5% means for creators Withholding tax is not an extra tax but an early instalment of income tax the creator already owes to LIRS, collected by whoever pays it. “This is a deduction-at-source obligation on the payer, not a charge on Selar’s own income, and not a demand that Selar personally discharge tax liabilities properly belonging to individual creators from its own funds,” LIRS said, citing section 51 of the NTAA and Regulation 4(1)(f) of the Deduction of Tax at Source (Withholding) Regulations 2024. “The withholding tax is not for the creator economy startups,” said a tax consultant at a Lagos advisory firm, who asked not to be named because he was not authorised to speak to the press. “Under the law, before they pay the creator, they’re supposed to withhold 5%.” If a platform owes a Lagos-based creator ₦1 million ($735) in royalties, it must withhold 5%, which is ₦50,000 ($37); then the creator receives ₦950,000 ($698) in cash and a credit note for the remaining ₦50,000 ($37), which they can set against their own tax bill. A credit note is the official receipt showing that tax has already been deducted and paid to the state on behalf of the creators. The creators have to present it when filing their return so the amount is deducted from what they owe in taxes. “They file their taxes. If their rate is 20%, they owe ₦200,000 ($147). They can say to the state, ‘I have a credit note for ₦50,000 ($37), so I only have a balance of ₦150,000 ($110) to pay,’” the consultant said. “That’s why we don’t usually see withholding tax as a special category of tax itself,” he added. “It’s just an advance of income taxes. The government wants to get their taxes early, because nobody wants to wait until the next year.” A creator who files a tax return in Lagos would not lose 5% of her earnings. She would pay part of her tax bill earlier than expected and feel it in her cash flow. The contract that decides it Whether any of this applies depends on one question: is a creator licencing their work to the buyer or selling it to them? The answer sits in the contract between the platform and the creator. Selar’s terms of service do not settle the question. Lawyers who spoke to TechCabal came away thinking the arrangement looks like a licence. Creators grant Selar the right to “use, modify, publicly perform, publicly display, reproduce, and distribute” their content on and through the platform, and that permission extends to letting other users of the service “also use your Content,” the platform’s terms and conditions show. Kelechi Ibe, co-founder of the tax compliance startup Taxstreem, argued that Selar earns its revenue by sub-licencing the creator’s product to customers, who pay Selar for the product, and Selar pays the creators for the licence and keeps a portion of the licence fees. “The licence and sublicence clauses change my view about the relationship between Selar and the creators,” he said. “I would categorise the payments Selar makes to the creators as royalties, simply because there is no express clause that grants a royalty-free licence.” Selar also lets creators pass its 4% charge to buyers instead of absorbing it. “If it were a commission, it would always be paid by the principal—in this case, the creators—to the agent,” Ibe said. “By allowing the users to pay the fee, which Selar attempts to classify as a commission, and it not being expressly stated that the users are doing so on behalf of the creator, it is clearly a payment for Selar’s services, which is the use of the licenced content.” The Nigeria Tax Act 2025 defines a royalty to include “payments of any kind received or receivable, paid or payable as a consideration for the use of, or the right to use or exploit any property.” The list is open-ended, and the property does not have to be intellectual. “It’s not limiting it,” said one tax lawyer who asked not to be named because she was not authorised to speak to the press. “As long as there’s an intellectual property that is being exploited and upon which some consideration of payment is being received, then that has been treated or can be treated as royalties.” “In most situations, they will be termed royalties, especially for a platform like Selar,” said an intellectual property lawyer who asked not to be named for the same reason. “It’s different if it’s just what Shopify does: come and showcase your goods, and your customers will reach you on here. Those would not be termed as royalties.” The contract may not be the last word. “When it comes to tax, we look at substance over form,” said the tax consultant at a Lagos advisory firm. “The words of the contract can be a good pointer for the tax authority to understand the nature of the transaction. However, what they will be looking out for is the substance of the transaction.” “The commercial substance of Selar’s arrangement with creators is the provision of software-as-a-service infrastructure (storefronts, payment integration, and delivery tooling) in exchange for a commission on transactions processed through the platform,” Selar said in a statement to TechCabal. “Selar creator payouts are not royalties.” “A Terms of Use document does not, anywhere in the world, serve as the sole basis for determining tax liability. It reflects part of a commercial relationship, not the full picture of a company’s business operations. Reading a single document in isolation is not a sufficient basis for determining a business’ tax liability,” Selar’s statement added. Nigeria has been here before In 2021 and 2022, the Federal Inland Revenue Service (now the National Revenue Service) appointed Bolt, the global ride-hailing platform, as a value-added tax collection agent for the independent drivers and food vendors on its platform. Bolt challenged the decision and made the argument Selar is making now: that it connects two parties, earns a fee, and is not the supplier. Bolt lost twice, and the Tax Appeal Tribunal dismissed the case in May 2023. The Federal High Court in Lagos affirmed the dismissal, holding that the tax authority acted within the law when it appointed the platform under section 10(3) of the VAT Act and awarded ₦1 million ($735) in costs against the company. Bolt filed an appeal at the Court of Appeal in September 2025, arguing that the power to appoint a collection agent is confined to transactions involving non-resident suppliers and that its drivers and vendors are Nigerian residents. The matter is yet to be decided. What all this means for the creator economy For the biggest sellers on these platforms, losing 5% is an inconvenience. They earn enough that the deduction really is an advance on a bill they were always going to pay, and the credit note settles it at year-end. For everyone else, the maths runs the other way. The 5% is deducted from gross sales, but income tax is charged only on what is left after reliefs. Under the Nigeria Tax Act 2025, the first ₦800,000 ($588) of annual income is tax-free, with up to ₦500,000 ($368) more deductible for rent. A creator earning ₦1 million ($735) through a platform in a year would have ₦50,000 ($37) withheld against a tax bill of roughly ₦30,000 ($22), and with the higher reliefs, against no bill at all. She would not be paying early. She would be owed a refund. Selar paid more than ₦18 billion ($13.2 million) to 400,000 creators last year. Earnings on these platforms concentrate among a small number of large sellers, leaving most creators far below the point where 5% of gross matches what they actually owe. Getting that money back requires a tax identification number, a filed return, and a credit note that reaches the right person. LIRS did not say whether any threshold exempts small creators or how someone who withheld more than they owe would recover it. None of this is settled. LIRS said its classification is preliminary and that no assessment exists. But its position is also that no warning was ever owed, because the duty to withhold applies on its own. True scale demands moving beyond surface-level integrations to robust execution. We’ve filtered the noise out of Moonshot 2026, optimising the conference strictly for high-calibre connections between startup founders, global financial operators, enterprise leaders and individuals rewiring Africa’s technical frameworks. Get 20% off Early Bird tickets for a limited time.