The Nigerian government is revising regulations with a view of imposing taxes on cryptocurrency trading and digital assets, seeking to capitalize on the the widespread use of cryptocurrency among its residents.
According to Consensys’ 2024 Perception Survey, 84% of Nigerian respondents reported owning a crypto wallet.
🇳🇬🇿🇦REPORT | Nigeria, South Africa Lead the World in Crypto Wallet Ownership, Says ConsenSys
According to the survey findings, over half the population in Nigeria (84%) and South Africa (66%) report owning a crypto wallet in 2024.https://t.co/BqdKvZz7YN @Consensys @YouGov pic.twitter.com/hvoHBJU7SJ
— BitKE (@BitcoinKE) December 13, 2024
Nigeria was also ranked second globally in crypto adoption in 2024 by the Chainalysis’ Geography of Cryptocurrency Report.
🇳🇬REPORT | #Nigeria Ranked 2nd Globally in #DeFi and the Only African Country in Top 20 by Chainalysis 2024 Crypto Adoption Index
“When we look at year-over-year growth in terms of types of services, we see that DeFi activity increased significantly in Sub-Saharan Africa, Latin… pic.twitter.com/foXhFCjaM1
— BitKE (@BitcoinKE) September 13, 2024
Now, based on local reports, a bill establishing a framework for taxing cryptocurrency transactions and introducing additional levies is currently under legislative review, with expectations of approval in Q1 2025.
In addition, the Nigeria Securities and Exchange Commission (SEC Nigeria) is drafting new rules to ensure that all qualifying transactions on regulated exchanges fall within the formal tax framework.
SEC Nigeria recognizes the potential for significant tax revenue from cryptocurrency, which could generate substantial income for the country. However, it has not provided a specific estimate of the expected earnings.
The regulator also intends to broaden crypto licensing to include formal centralized exchanges, enhancing oversight and taxation.
“We expect a gradual shift towards centralized exchanges, as they will offer greater protection and reassurance for investors,” the SEC Nigeria stated.
SEC Nigeria issued its first licenses to cryptocurrency exchanges in August 2024, marking the start of clearer regulations and oversight for the country’s crypto industry.
🇳🇬REGULATION | Nigerian Crypto Exchange, Quidax, Receives Provisional Operating License from SEC Nigeria
With the license granted by the Nigerian SEC, Quidax is now able to collaborate with banks and other financial institutions, subject to the Central Bank of Nigeria’s… pic.twitter.com/4gPpLyJi4z
— BitKE (@BitcoinKE) August 29, 2024
In December 2024, it revised its marketing rules to address the growing issue of social media influencers promoting unregulated crypto products. Under the new guidelines, virtual asset service providers must secure approval before partnering with third-party marketers to promote their crypto offerings.
[TECH] REGULATION | Influencers in Nigeria Must Promote Only Licensed Crypto Firms, Says Revised SEC Nigeria Regulations: The Nigerian Securities and Exchange Commission (SEC Nigeria) has proposed a new law .. https://t.co/JfH7LW6dyn via @BitcoinKE
— Top Kenyan Blogs (@Blogs_Kenya) December 23, 2024
With the fast-growing crypto industry, the federal government sees an opportunity to generate tax revenue while strengthening digital asset regulation. To support this initiative, the Tinubu administration has introduced several fiscal reforms since taking office in 2023, aiming to increase government revenue and reduce the deficit.
Before leaving office, former President, Muhammadu Buhari, had also signed the Finance Act 2023 into law, introducing key tax reforms to modernize Nigeria’s fiscal framework.
The Act includes a 10% tax on gains from the disposal of digital assets, acknowledging the economic potential of cryptocurrencies and ensuring they contribute to the country’s development.
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