Nigerian lawmakers eye economic boost through crypto taxation News โธ Nigeria โธ Bitcoin โธ Regulation
Nigerian lawmakers eye economic boost through crypto taxation
Nigeria has arecently adopted a stringent regulatory regime towards the emerging industry.
2 min read
Updated: Aug. 19, 2024 at 5:41 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The Nigerian Federal Inland Revenue Service (FIRS) plans to introduce legislation to tax the growing crypto sector, according to local media outlet Business Day.
FIRS Executive Chairman Zacch Adedeji announced this during a session with the National Assembly’s Finance Committees, highlighting that the new regulation would drive economic growth while encouraging innovation.
Adedeji emphasized that this initiative aims to modernize Nigeria’s outdated regulatory framework by incorporating new technologies previously unaddressed by existing laws.
Dare Adekanmbi, Adedeji’s special adviser on media reportedly stated:
“We need a law that regulates that area of our economy. This is why we are having this engagement with the legislators. We will regulate it in a way that is not injurious to the economic development of Nigeria.”
Industry experts have been urging the Nigerian government to adopt this approach for a number of years. In 2021, when the government banned financial institutions from interacting with the crypto space, Tayo Oyedeji, a university professor, suggested that emerging economies should prioritize taxation over prohibition. He said:
“Nigeria (a big crypto market) can make millions from crypto gains tax.”
Nigeria is one of the largest crypto markets in Africa. The Nigerian SEC Director General Emomotimi Agama recently said the country’s digital assets market is estimated to be worth over $400 million.
The legislative move comes as some crypto platforms begin collecting Value-Added Tax (VAT) on transaction fees. In July, KuCoin announced it would start charging a 7.5% VAT on all transaction fees in Nigeria.
Nigeria crypto
Meanwhile, the push for crypto regulation in Nigeria has intensified recently. Finance Minister Wale Edun urged the Securities and Exchange Commission (SEC) to prioritize regulatory clarity for the industry.
This follows a recent crackdown on crypto platforms, prompting global players like OKX to exit the Nigerian market.
Additionally, Binance is facing legal action from Nigerian authorities for alleged money laundering and tax evasion. Tigran Gambaryan, a Binance executive, is currently detained at the Kuje Correctional Centre in Abuja despite growing international calls for his release due to his deteriorating health.
However, Nigerian authorities assert that these actions are part of a broader effort to ensure compliance in the emerging industry
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Binance
Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies.
OKX
OKX is a world-leading digital asset exchange, providing advanced financial services to global traders by using blockchain technology.
KuCoin
KuCoinโฏis a global cryptocurrency exchange for numerous digital assetsโฏand cryptocurrencies that launched in September 2017.