The tax regulator in Nigeria, known as the Federal Inland Revenue Service (FIRS), is set to implement new tax laws in September to govern the cryptocurrency industry.
Earlier in June, Nigeria initiated a 7.5% value-added tax (VAT) on all cryptocurrency transactions, paving the way for broader tax regulations on crypto entities.
Questions arise on how Nigeria will effectively tax an industry it previously attempted to stifle.
In 2022, the cryptocurrency sector facilitated $20 billion in remittance inflows to Nigeria, leading to concerns about illicit activities and prompting the government to take stringent actions.
The government’s implicit ban on crypto activities in Nigeria in 2022, including the prosecution of popular trading platforms, signaled a crackdown on the industry. Subsequently, the government indicated plans to target other peer-to-peer exchanges dealing with the naira.
The recent move towards regulating the crypto industry may indicate a shift in perception or a fulfillment of earlier promises to tightly oversee the sector.
The Securities and Exchange Commission (SEC) in the country has also been active, increasing operational costs for crypto firms and mandating physical presence for companies and founders.
Dr. Zacch Adedeji, the FIRS executive chairman, emphasized the importance of regulating crypto in a manner that benefits Nigeria’s economy without undermining its popularity among millions of daily users and traders.