Selar-LIRS tax bill is the headline. The bigger story is what it could change.

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At first glance, the dispute between digital commerce platform Selar and the Lagos State Internal Revenue Service (LIRS) looks like a familiar tax disagreement. A company receives a tax assessment, objects to it, and the tax authority stands by its interpretation.

But beneath that familiar story is a much bigger question. As Nigeria’s digital economy grows, how should the law treat the different ways digital businesses make money?

That is the question quietly emerging from the dispute between Selar and LIRS. While the outcome remains uncertain, the answer could influence how software companies, creator platforms and other digital businesses are taxed under Nigeria’s new tax framework.

Where the disagreement begins

Selar founder Douglas Kendyson recently disclosed that LIRS is seeking to recover a 5% backdated tax after classifying part of the company’s revenue as royalty income.

Selar disagrees. According to Kendyson, the company earns most of its revenue from transaction commissions, subscription fees and foreign exchange spreads, not from royalties linked to intellectual property.

The dispute comes at an important time. Nigeria’s Tax Act 2025, which took effect in January 2026, introduced updated definitions for different types of taxable income, including royalties. While the matter is yet to be resolved, it has become one of the first public disputes testing how those definitions apply to a digital platform.

The Bigger consequences

On paper, the disagreement centres on a single word: royalty.

Most people think of royalties as payments made to musicians, writers or filmmakers. In tax law, however, the meaning is broader. It can also include payments for using software, patents, trademarks, copyrights and other forms of intellectual property.

The challenge is that today’s digital businesses rarely fit into one simple category. A single platform can process payments, sell subscriptions, provide software and help creators earn income, all at the same time.

That makes the way revenue is classified just as important as the tax rules themselves.

Selar won’t be the last

Whether Selar succeeds or not, the questions raised by this dispute are unlikely to end here.

Across Nigeria, software companies, fintechs, SaaS businesses, online marketplaces and creator platforms use similar digital business models. How their revenue is classified could shape future tax assessments across the industry.

For founders, the issue is bigger than the amount of tax they pay. Businesses need clear and consistent rules so they can plan, invest and grow with confidence. That kind of certainty is often just as valuable as the tax rate itself.

Why this question is coming up now

Nigeria has spent the past few years updating its tax laws to better reflect a fast-changing economy. The Tax Act 2025 is part of that effort, bringing together tax rules and providing clearer definitions for different types of income.

But laws are only truly tested when they meet real businesses and real situations. The Selar dispute is one of the first public examples of that process.

What comes after the headlines?

Neither Selar nor LIRS has publicly indicated that the matter has been resolved.

If Selar successfully challenges the classification, the case could become an important reference point for how digital platform revenue is treated in future. If LIRS’s position is upheld, other digital businesses may need to review how their income is classified under Nigeria’s tax laws.

Either way, this is a case that founders, investors and tax professionals will be watching closely.

Villpress Intelligence | Read between the Lines

Every new industry reaches a point where old rules meet new ideas.

Sometimes that happens through innovation. Sometimes it happens in court. And sometimes it begins with a tax bill.

The Selar-LIRS dispute is not just about whether one company owes more tax. It reflects a bigger challenge: how tax systems built for traditional businesses adapt to companies whose products and services exist mostly online.

Whether this case becomes a legal precedent or simply starts a wider conversation, it highlights an important shift. As Nigeria’s digital economy grows, success will depend not only on innovation but also on clear and predictable rules.