Nigerian lawmakers consider taxing cryptocurrency to boost economy

The Nigerian Federal Inland Revenue Service (FIRS) is planning to introduce legislation to tax the growing crypto sector, as reported by Business Day.

Zacch Adedeji, the Executive Chairman of FIRS, made this announcement during a meeting with the National Assembly’s Finance Committees, stating that the new regulations would promote economic growth and innovation.

Adedeji highlighted the need to update Nigeria’s regulatory framework to accommodate new technologies that were previously unregulated. He emphasized that the goal is to create a law that would not hinder Nigeria’s economic development.

Dare Adekanmbi, Adedeji’s special adviser on media, was quoted as saying:

“We need a law that regulates that area of our economy. This is why we are engaging with the legislators. We aim to regulate it in a way that supports the economic development of Nigeria.”

Industry experts have been advocating for the Nigerian government to adopt this approach for several years. In 2021, when financial institutions were prohibited from engaging with the crypto space, university professor Tayo Oyedeji suggested that taxation should be prioritized over prohibition. He stated:

“Nigeria (a big crypto market) can make millions from crypto gains tax.”

Nigeria is a significant crypto market in Africa, with the Nigerian SEC Director General Emomotimi Agama estimating the country’s digital assets market to be worth over $400 million.

This legislative move coincides with some crypto platforms starting to impose Value-Added Tax (VAT) on transaction fees. KuCoin, for instance, announced in July that it would apply a 7.5% VAT on all transaction fees in Nigeria.

Nigeria crypto

Furthermore, there has been a recent increase in the push for crypto regulation in Nigeria. Finance Minister Wale Edun called on the Securities and Exchange Commission (SEC) to focus on providing regulatory clarity for the industry.

This comes after a crackdown on crypto platforms, leading to global players like OKX exiting the Nigerian market. Additionally, Binance is facing legal actions from Nigerian authorities over alleged money laundering and tax evasion. Tigran Gambaryan, a Binance executive, is currently detained at the Kuje Correctional Centre in Abuja despite international calls for his release due to health concerns.

However, Nigerian authorities maintain that these actions are part of a broader effort to ensure compliance in the emerging industry mentioned in this article.

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