Nigeria plans to introduce Law to Tax Cryptocurrency by September
The Nigerian government has announced plans to introduce new tax laws that will include regulations for the cryptocurrency industry in the country by September.
According to local news outlet Punch Nigeria, a bill aimed at taxing the cryptocurrency industry will be presented to parliament for approval, stated Dr. Zacch Adedeji, the Executive Chairman of Nigeria's Federal Inland Revenue Service (FIRS).
Adedeji made this statement over the weekend during a stakeholder engagement with the Senate and House Committee on Finance that was sponsored by the Service's Intergovernmental Relations Department.
He further explained the service plans to introduce the new crypto laws in the country. Adedeji stated that "the idea is to have the legislation governing it first, which is why we are here with the law, which will act as the foundation for charging." He added, “All that remains is to devise a strategy for regulating it so as to prevent any harm to Nigeria's economic growth.”
Adedeji briefed the lawmakers about the proposed bill during his opening remarks. Just to let you know, by September, we are proposing a law that would completely revamp Nigeria's revenue administration system by harmonizing, recoding, and streamlining our current tax laws. He further said Nigeria cannot run away from cryptocurrency, but there is currently no law in the country that regulates the cryptocurrency.
With the departure of Binance, which the Nigerian government accused of manipulating the naira-to-dollar exchange rate, cryptocurrency platforms have come under intense scrutiny. Additionally, according to Central Bank Governor Olayemi Cardoso, cryptocurrency exchange Binance allowed $26 billion in funds to leave the country without being tracked last year, which hurt tax revenues and set off a chain of events that resulted in Tigran Gambaryan, a Binance executive, being arrested.
The cryptocurrency exchange KuCoin announced last month that it had begun charging VAT to Nigerian users for transaction fees. In a post, the exchange wrote to Nigerian users to let them know about a significant regulatory change that affects them. The company said that effective July 8, 2024, it will start charging users whose KYC information is registered in Nigeria a Value-Added Tax ("VAT") at a rate of 7.5% on transaction fees in each trade.
In the meantime, in order to expedite their registration and onboarding for the upcoming new Digital Assets Rules, virtual asset service providers are being asked to join the Securities and Exchange Commission's (SEC) Accelerated Regulatory Incubation Programme (ARIP). Remember that it proposed an amendment in March 2024 after first issuing regulations and guidelines for all providers of cryptocurrency and digital asset services in May 2022.
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