Before leaving office on May 28, Former Nigerian President Muhammadu Buhari signed Finance Act 2023 into law.
The law introduce a series of fiscal reforms aimed at modernizing the country’s fiscal framework. Among its provisions is the introduction of a 10% tax on gains derived from the alienation of digital assets, including cryptocurrencies.
The extensive legislation aims to improve fiscal transparency, boost revenue generation and promote economic growth. Recognizing the growing importance of digital assets, the law intends to impose a tax on cryptocurrencies.
With that, the nigerian government aims to create a level playing field to ensure that holders of digital assets contribute their share of taxes to the development of the country. This indicates Nigeria’s recognition of the growing influence and economic potential of digital assets, while ensuring that the tax system keeps pace with the evolving financial landscape. Cointelegraph reached out to members of the local crypto ecosystem to find out how the industry and community are receiving the new legislation.
Barnette Akomolafe, CEO of cryptocurrency payment app M7pay, told Cointelegraph how the new taxes can be seen as a step towards the recognition of cryptocurrencies as legitimate assets, and their integration into the existing financial and regulatory framework. This comes after the Central Bank of Nigeria banned commercial banks from servicing cryptocurrency exchanges in February 2021.
Another local cryptocurrency expert, who preferred to remain anonymous, said that Crypto taxation could be challenging due to the unique nature of digital assets, such as valuation, transaction tracking, and international complexities. He added that governments need to set clear guidelines and provide proper education and support to taxpayers. This point of view seems to be supported by more cryptocurrency enthusiasts.
Just read that very soon you will all start paying taxes on your crypto and Forex profits in Nigeria.
10% of your capital gains goes to government. What are we going to get in return?
— CryptoLord NE (@CryptoDefiLord) June 8, 2023
I just read that very soon all of you will start paying taxes on your cryptocurrency and foreign exchange earnings in Nigeria.
10% of your capital gains goes to the government. What will we receive in return?
In many cases, governments require the cooperation of cryptocurrency exchanges operating within their jurisdiction to track users’ capital gains.. By working with exchanges, authorities can access transaction data and identify individuals or entities for tax purposes. However, the level of cooperation and specific regulations vary from country to country. Some jurisdictions have implemented stricter requirements for exchanges to report user information, while others may have limited regulations or are in the process of developing them.
Cointelegraph reached out to Binance Africa for comment but did not hear back before publishing this note.
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