Douglas Kendyson, founder and CEO of Selar, has publicly accused the Lagos State Internal Revenue Service of pursuing his company for a backdated 5 percent royalty fee on all sales, a levy he says has no basis in how the creator commerce platform actually makes money. In a LinkedIn post tagging Lagos State Governor Babajide Sanwo-Olu and Nigeria’s Minister of Art, Culture, Tourism and Creative Economy, Hannatu Musa Musawa, Kendyson said LIRS has spent months hounding Selar despite the company sharing records to prove it does not run a royalty-based business.
Selar has built its reputation as the infrastructure layer for Nigeria’s digital creator boom, the platform where authors, coaches, and course creators turn knowledge into income. Kendyson’s public appeal turns that same platform into a battleground over how African tax authorities classify fast-growing digital businesses, and whether enforcement is keeping pace with how those businesses actually operate.
Who a Royalty Reclassification Would Hit
Selar says it hosts more than 400,000 creators across Nigeria and 13 other African countries, and that it paid out roughly ₦18 billion to nearly 400,000 sellers in 2025 alone. Kendyson framed the LIRS demand as a tax on that entire creator base rather than on Selar itself, arguing that a 5 percent royalty fee would force the company to raise its pricing and pass the cost down to the same young entrepreneurs the platform was built to serve. Those creators already pay personal income tax on what they earn, a point Kendyson raised to argue that a royalty levy on top of existing obligations amounts to double taxation on the same income stream.
He was equally direct about who is not affected: Selar’s competitors in adjacent categories. Kendyson compared his company’s business model to Shopify and Teachable, software platforms that charge a transaction commission rather than collecting royalties, and said no creator-economy company anywhere in the world charges royalty rates as high as 5 percent. Selar takes a 4 percent commission on sales, he said, and most of that goes straight to its payment processing partners, who charge 1 to 3 percent on their own.
LIRS Has Not Publicly Responded
LIRS had not issued a public statement on the dispute at the time of Kendyson’s post, and TechMoonshot could not immediately confirm the agency’s official position on how it is classifying Selar’s revenue. Kendyson said Selar had already shared documentation with the agency’s team to demonstrate its transaction-fee model, and that the back-and-forth has dragged on long enough to distract from running the business. He noted that Selar fulfilled its 2025 tax obligations at a value he described as “almost 9 figures” in naira, and pointed to the company’s Smart Hustle anti-fraud initiative, which it frames as a contribution to consumer protection in Nigeria’s digital economy, as evidence that Selar has tried to operate as a compliant, cooperative taxpayer rather than an adversarial one.
The dispute lands at a sensitive moment for Lagos’ revenue authority. LIRS has been publicly credited with helping push the state’s internally generated revenue past ₦1.3 trillion in 2024, a 45 percent jump that Sanwo-Olu has held up as proof the agency’s aggressive digital tax enforcement is working. A high-profile standoff with one of the country’s best-known creator-economy startups tests whether that enforcement machinery can distinguish between software commissions and royalty income, a distinction that determines which businesses fall under which tax treatment.
Regional Precedent for Digital Tax Ambiguity
Nigeria is not the only African market where regulators have struggled to fit digital platforms into tax categories built for older business models. Egypt spent nearly a decade with conflicting interpretations of how its VAT law applied to exported tech services before the country’s tax authority finally issued clear guidance in late 2025. Rwanda has faced its own version of the classification problem, where the government’s ambiguous public statements on TikTok creator monetization left musicians and other creators uncertain about what income rules would actually apply to them.
Nigeria’s own tax overhaul adds another layer of context. The Nigeria Tax Act 2025, which took effect in January, rewrote how personal and business income is calculated and pushed enforcement toward tighter, more digitally tracked compliance. That national push for stricter collection is precisely the environment in which a state-level dispute over royalty classification carries outsized stakes: get the classification wrong, and a software company’s transaction fees suddenly look like royalty income subject to a different, higher tax treatment.
Kendyson’s post also arrives months after Selar found itself at the center of a separate, more personal controversy. Selar’s public spat with rival platform Mainstack over a guerrilla marketing stunt at a Lagos creator conference already put Kendyson’s combative communication style on display earlier this year. This time, the target is not a competitor but a state institution, and the stakes for Selar are financial rather than reputational alone.
What Comes Next
Kendyson’s post had drawn more than 1,000 reactions and dozens of reposts within hours, a sign of how closely Nigeria’s tech and creator communities are watching the outcome. Whether LIRS backs off the royalty classification, negotiates a narrower settlement, or holds its position will set an informal precedent for how the agency treats other e-commerce and SaaS platforms operating in Lagos. For now, the dispute remains a public pressure campaign rather than a resolved tax case, and neither LIRS nor the Lagos State government had responded publicly as of this writing. TechMoonshot has reached out to LIRS for comment and will update this story with any response.
