Nigeria’s Federal Inland Revenue Service (FIRS) is planning to introduce legislation to tax the growing crypto sector, according to local media outlet Business Day.
FIRS Executive Chairman, Zacch Adedeji, announced this during a session with the Finance Committees of the National Assembly, stressing that the new regulations would boost economic growth while encouraging innovation.
Adedeji stressed that the initiative is aimed at modernizing Nigeria’s outdated regulatory framework by incorporating new technologies hitherto not accommodated by existing laws.
Dare Adekanmbi, Adedeji’s special adviser on media, was quoted as saying:
“We need a law that regulates this sector of our economy. That is why we have engaged in this dialogue with the legislators. We are going to regulate it in a manner that does not harm the economic development of Nigeria.”
Industry experts have been urging the Nigerian government to adopt this approach for several years. In 2021, when the government banned financial institutions from interacting with the crypto space, university professor Tayo Oyedeji suggested that emerging economies should prioritize taxation over prohibition. He said:
“Nigeria (a big one crypto market) can earn millions thanks to crypto gains tax.”
Nigeria is one of the largest cryptocurrency markets in Africa. Nigerian SEC Director General Emomotimi Agama recently said that the country’s digital asset market is estimated at over $400 million.
The legislation comes as some cryptocurrency platforms begin charging value-added tax (VAT) on transaction fees. In July, KuCoin announced that it would begin charging 7.5% VAT on all transaction fees in Nigeria.
Cryptocurrencies from Nigeria
Meanwhile, pressure for cryptocurrency regulation in Nigeria has recently intensified, with Finance Minister Wale Edun urging the Securities and Exchange Commission (SEC) to prioritize regulatory clarity for the sector.
This follows a recent crackdown on cryptocurrency platforms, prompting global players like OKX to exit the Nigerian market.
Additionally, Binance is facing legal action from Nigerian authorities for alleged money laundering and tax evasion. Binance executive Tigran Gambaryan is currently being held at the Kuje Correctional Facility in Abuja, despite growing international calls for his release due to his deteriorating health.
However, Nigerian authorities say the measures are part of a broader effort to ensure compliance in the emerging sector.
