Nigeria’s Securities and Exchange Commission (SEC) is taking steps to tax crypto transactions in an effort to boost government revenue. The regulatory body is looking to include eligible crypto transactions on licensed exchanges in the country’s tax framework. A bill outlining the tax structure is currently under review and could be approved within the quarter.
With Nigeria being one of the leading countries in crypto adoption, officials believe that the taxation of crypto transactions could generate a significant amount of revenue. Some exchanges, such as KuCoin, have already started implementing tax measures by collecting a 7.5% value-added tax (VAT) on trading fees from Nigerian users.
This move towards taxing crypto transactions may indicate a shift in the government’s stance on crypto. Last year, the SEC implemented a licensing framework that granted provisional licenses to platforms like Busha and Quidax as registered virtual asset service providers (VASPs).
The tax developments come amidst an ongoing dispute between Nigeria and Binance, a global crypto exchange. Nigerian authorities have been at odds with Binance over regulatory compliance issues. Recently, Nigeria’s Minister of Information and National Orientation dismissed bribery allegations made by a Binance executive and urged the public to disregard them.
The executive had accused Nigerian officials of seeking bribes from Binance representatives and also alleged that crypto exchanges were manipulating the naira. However, the authorities denied these claims and stated that they had reached a diplomatic agreement with the US for the executive’s release on humanitarian grounds, instead of accepting a $5 million deposit from Binance.
Overall, the SEC’s move to tax crypto transactions and the ongoing dispute with Binance highlight the evolving regulatory landscape surrounding cryptocurrencies in Nigeria. As the country continues to navigate these challenges, it remains to be seen how these developments will impact the crypto industry and its users in Nigeria.