Nigerian legislators are looking to stimulate the economy by implementing crypto taxation
Nigeria has recently implemented a rigorous regulatory framework on the emerging industry.
Business Day, a local media outlet, has reported that the Nigerian Federal Inland Revenue Service (FIRS) intends to introduce legislation to tax the expanding crypto sector.
During a meeting with the Finance Committees of the National Assembly, FIRS Executive Chairman Zacch Adedeji declared that the new regulation would boost economic development and promote innovation.
Adedeji underscored that the objective of this initiative is to modernize Nigeria’s antiquated regulatory framework by integrating new technologies that were previously unaccounted for by existing legislation.
The Nigerian government has been under pressure from industry experts to implement this strategy for an extended period of time. Tayo Oyedeji, a university professor, proposed that emerging economies should prioritize taxation over prohibition in 2021, when the government prohibited financial institutions from engaging with the crypto sector. He stated:
“Nigeria, a significant crypto market, has the potential to generate millions in revenue from the taxation of crypto proceeds.”
Nigeria is one of the most significant crypto markets in Africa. In recent news, the Nigerian Securities and Exchange Commission (SEC) Director General, Emomotimi Agama, estimated that the country’s digital assets market is worth more than $400 million.
This legislative action coincides with the implementation of Value-Added Tax (VAT) on transaction fees by certain cryptocurrency platforms. KuCoin declared in July that it would implement a 7.5% VAT on all transaction fees in Nigeria.
In the interim, there has been a recent increase in the advocacy for cryptocurrency regulation in Nigeria. Wale Edun, the Finance Minister, has encouraged the Securities and Exchange Commission (SEC) to prioritize regulatory clarity for the industry.
This is the result of a recent crackdown on crypto platforms, which has prompted global giants such as OKX to withdraw from the Nigerian market.
Furthermore, Nigerian authorities are pursuing legal action against Binance for alleged tax evasion and money laundering. In spite of the increasing international pressure for his release, Tigran Gambaryan, a Binance executive, is presently being held at the Kuje Correctional Centre in Abuja. This is due to his deteriorating health.
Nevertheless, Nigerian authorities maintain that these measures are part of a more comprehensive initiative to guarantee compliance in the emerging industry.
Also Read: New regulations in the United States will treat cryptocurrency as cash
