Nigeria’s Federal Inland Revenue Service (FIRS) plans to introduce legislation to tax the growing crypto sector, according to local media outlet Business Day.
FIRS Executive Chairman Zacch Adedeji made this known 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Adedeji stressed that this initiative aims to modernize Nigeria’s outdated regulatory framework by integrating new technologies previously not addressed in existing legislation.
Dare Adekanmbi, Adedeji’s Special Media Adviser, reportedly stated:
“We need a law that regulates that part of our economy. That is why we have this agreement with the legislators. We will regulate it in a manner that is not detrimental to the economic development of Nigeria.”
Industry experts have been urging the Nigerian government to adopt this approach for a number of years. In 2021, when the government banned financial institutions from dealing with the crypto space, Tayo Oyedeji, a university professor, suggested that emerging economies should prioritize taxation over a ban. He said:
“Nigeria (a big one crypto market) where millions can be made crypto profits tax.”
Nigeria is one of the largest crypto markets in Africa. Nigerian SEC Director General Emomotimi Agama recently said the country’s digital asset market is estimated to be worth more than $400 million.
The legislative move comes as some crypto platforms begin collecting value-added tax (VAT) on transaction fees. In July, KuCoin announced that it would impose a 7.5% VAT on all transaction fees in Nigeria.
Nigerian crypto
Meanwhile, the push for crypto regulation in Nigeria has increased lately. Finance Minister Wale Edun urged the Securities and Exchange Commission (SEC) to prioritize regulatory clarity for the sector.
This follows a recent crackdown on crypto platforms, which has seen global players like OKX exit the Nigerian market.
Additionally, Binance is facing legal action from Nigerian authorities for alleged money laundering and tax evasion. Tigran Gambaryan, a Binance executive, is currently being held at the Kuje Correctional Center in Abuja, despite mounting international calls for his release due to his deteriorating health.
However, Nigerian authorities claim that these actions are part of a broader effort to ensure compliance in the emerging industry