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Nigeria is preparing to introduce new tax laws aimed at regulating cryptocurrency transactions by September 2024. This move marks a significant step towards establishing a legal framework for digital assets in the country.
Senator Sani Musa, Chairman of the Senate Committee on Finance, emphasized the necessity of regulating cryptocurrencies, which have rapidly become a major source of income. He noted the current lack of legal guidelines and underscored the importance of updating outdated tax laws to reflect emerging trends.
“We cannot ignore cryptocurrency, as there is currently no law in Nigeria regulating it. There is a need for legislation to govern this type of transaction, similar to what is being done in other countries around the world. When there are innovations in the system, you must plan to regulate them in a way that is not detrimental to Nigeria’s economic development,” Musa stated.
The proposed regulations are expected to prompt the Executive to submit a bill for necessary amendments, repeals, and re-enactments of existing laws to accommodate these changes.
In parallel, the Securities and Exchange Commission (SEC) has called on virtual asset service providers to join its Accelerated Regulatory Incubation Programme (ARIP). This program is designed to expedite their registration and compliance with the forthcoming Digital Assets Rules. The SEC initially issued guidelines for crypto and digital asset service providers in May 2022, with proposed amendments introduced in March 2024.
Additionally, the Federal Inland Revenue Service (FIRS) is pursuing legal action against the global cryptocurrency exchange Binance, accusing the company of tax evasion on four counts. The trial is scheduled to commence on October 11, 2024.
Other cryptocurrency firms have also been impacted by Nigeria’s evolving regulatory landscape. OKX has ceased operations in the country, citing changes in local laws. KuCoin, after suspending its peer-to-peer (P2P) Nigerian Naira (NGN) services, announced the introduction of a 7.5% value-added tax (VAT) on transactions, aligning with the latest regulatory updates.
Nigeria is not alone in its regulatory efforts; other African nations, including Kenya, Ghana, and South Africa, are also advancing their own frameworks to manage the virtual asset environment.
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