Nigeria to tax crypto, digital assets 10% on capital gains: Experts react

On the day prior to his exit from office on May 28, ex-Nigerian President Muhammadu Buhari officially sanctioned the Finance Act, 2023.

The act brought forth a set of tax alterations meant to update the nation’s financial structure. Among its regulations was the implementation of a 10% levy on profits earned from the trading of digital possessions, such as cryptocurrencies.

The proposed law seeks to increase financial transparency, increase income production, and foster economic expansion. Taking into account the growing importance of digital assets, the act endeavors to levy a tax on digital currencies.

By taking this action, the Nigerian government is aiming to establish a fair and equal platform to guarantee that those who own digital assets pay their taxes to assist in the nation’s growth. This demonstrates Nigeria’s understanding of the increasing power and economic capability of digital assets, as well as making certain that the tax system is up-to-date with the ever-changing financial environment. Cointelegraph reached out to individuals in the local crypto sphere to find out how the industry and the community are responding to the new regulations.

Barnette Akomolafe, the CEO of the cryptocurrency payments app M7pay, recently spoke to Cointelegraph about how the new taxes can be viewed as a move towards acknowledging cryptocurrencies as legitimate possessions and incorporating them into the prevailing financial and regulatory system. This follows the Central Bank of Nigeria’s prohibition of commercial banks from providing services to cryptocurrency exchanges in February 2021.

A Nigerian cryptocurrency firm has halted withdrawals following a breach involving Bitcoin and Nigerian naira.

An anonymous local crypto specialist said that taxing cryptocurrencies could be difficult because of the distinctive qualities of digital assets, such as assessing their value, tracing transactions and global intricacies. They further declared that governments should set out definite regulations and give suitable instruction and assistance to taxpayers. This opinion was apparently shared by other crypto aficionados.

In numerous instances, governments necessitate the collaboration of crypto exchanges running within their territory to monitor users’ capital gains. By collaborating with exchanges, authorities can acquire transaction data and recognize persons or entities for tax purposes. Nevertheless, the magnitude of cooperation and precise regulations fluctuate from nation to nation. Several jurisdictions have implemented more stringent demands for exchanges to report user information, while others may have limited regulations or are in the process of formulating them.

Cointelegraph attempted to contact Binance Africa for a statement but had not received a reply by the time of publication.

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