SEC Plans to Tax Crypto Transactions in Nigeria
The Securities and Exchange Commission (SEC) in Nigeria is currently working on a plan to introduce taxes on cryptocurrency transactions as part of a larger strategy to boost government revenues.
Regulating Crypto Transactions
According to a recent report by Bloomberg, the SEC aims to include eligible crypto transactions on licensed exchanges within the country’s tax framework. A new bill outlining the tax structure is currently under review and could potentially be approved in the near future.
While specific revenue projections have not been disclosed by the SEC, officials are optimistic that the initiative will generate a substantial amount of revenue given Nigeria’s prominent position in crypto adoption globally.
Implementation of Tax Measures
Some exchanges have already taken steps to implement tax measures. For instance, KuCoin, a major trading platform in Nigeria, began collecting a 7.5% value-added tax (VAT) on trading fees from Nigerian users last year.
Industry experts believe that this taxation policy signals a shift in the government’s approach to cryptocurrencies. In the past year, the SEC introduced a licensing framework that granted provisional licenses to platforms like Busha and Quidax as registered virtual asset service providers (VASPs).
Ongoing Binance Dispute
The development of crypto taxation in Nigeria coincides with an ongoing dispute between the government and Binance, a global cryptocurrency exchange. Authorities in Nigeria have been in conflict with Binance over regulatory compliance issues for some time.
Recently, Mohammed Idris, Nigeria’s Minister of Information and National Orientation, refuted bribery allegations made by Binance executive Tigran Gambaryan. Idris urged the public to dismiss these claims and emphasized that Nigerian officials were not involved in any bribery attempts related to crypto exchanges.
In response to Gambaryan’s accusations, the authorities released a statement denying the bribery claims and accused Binance of trying to secure Gambaryan’s release by offering a $5 million deposit. However, the government clarified that a diplomatic agreement with the US was reached for his release on humanitarian grounds.
