The Digital Currency Coalition (DCC), the largest coalition of crypto asset practitioners and founders in the African digital currency space, has expressed concern over the plans by the Federal Government to tax digital assets as provided in the Finance Act 2023.

The Coalition in a statement released on Monday said the plan to tax without a proper regulation of the industry would not augur well for the country. The coalition noted that imposing taxes when banks in the country are not allowed to process any digital currency-related transaction calls for concerns.

While noting that the industry’s potential is currently being hindered by the banking service ban, DCC, said with proper regulation and strategic implementation, digital currencies can serve as catalysts for job creation, innovation, and sustainable development in Nigeria.

Embracing digital currency

In the statement jointly signed by the CEO of Tradefada, Seun Dania, CEO and Co-founder of Quidax, Buchi Okoro, CEO and Co-founder of Nestcoin, Yele Bademosi, and PMO Digital Currency Coalition, Geoffrey Nwokolo, the coalition said:

“We firmly believe that embracing and leveraging the opportunities presented by digital currencies and blockchain can make a significant contribution to the nation’s economic advancement. While we acknowledge the potential risks and challenges associated with this emerging sector, we emphasize that with proper regulation and strategic implementation, digital currencies can serve as catalysts for job creation, innovation, and sustainable development.

“As the leading voice in the digital currency and blockchain space, DCC stands ready to collaborate with the government, leveraging our expertise to shape a robust and future-oriented digital currency ecosystem. We are committed to demonstrating to the nation’s leaders how embracing digital currencies can lead to sustainable job creation, especially for the young population, fostering independence and freeing up national resources for other social causes.”

While acknowledging the positive steps taken by the government in formulating a national blockchain policy, the DCC applauded the collaborative approach that involved stakeholders within the space, includiing the Digital Currency Coalition, in creating the policy and facilitating its implementation.

#GOATMoments #taxation

Cryptocurrencies have emerged as a popular investment option and medium of exchange in recent years. However, the tax treatment of cryptocurrencies can be complex and often confusing for both individuals and businesses.

Classification of Cryptocurrencies:

From a tax perspective, cryptocurrencies are generally treated as property rather than traditional currency. This means that each cryptocurrency transaction, whether it's buying, selling, or exchanging, can trigger taxable events similar to those involving stocks or real estate.

Capital Gains and Losses:

One of the most important aspects of #cryptocurrency taxation is the calculation of capital gains and losses. When you sell or exchange a cryptocurrency, any profit or loss you realize is considered a capital gain or loss and may be subject to taxation. The length of time you held the cryptocurrency before selling or exchanging it determines whether it is classified as a short-term or long-term capital gain/loss, which can affect the tax rate.

Reporting Cryptocurrency Transactions:

It is crucial to accurately report your cryptocurrency transactions on your tax return. This includes documenting the date of acquisition, the cost basis of the cryptocurrency, the date of sale or exchange, the proceeds received, and any associated fees. Failure to report cryptocurrency transactions can lead to penalties or even legal consequences, so it is essential to maintain detailed records.

Mining and Staking:

Cryptocurrency mining, the process of validating transactions and adding them to the blockchain, can also have tax implications. When you successfully mine new cryptocurrency, it may be considered taxable income at its fair market value on the day of receipt. Similarly, if you participate in staking (holding cryptocurrencies to support network operations), the rewards you receive may also be subject to taxation.

Cryptocurrency as Payment:

Using cryptocurrency to pay for goods and services is becoming more common. When you use cryptocurrency in this way, it triggers a taxable event similar to selling or exchanging the cryptocurrency. Both the buyer and the seller need to consider the fair market value of the cryptocurrency at the time of the transaction for tax purposes.

International Tax Considerations:

Cryptocurrencies operate globally, and it is essential to understand the tax implications when dealing with international transactions. Different countries have varying tax #regulations concerning cryptocurrencies, including reporting requirements and potential double taxation. If you engage in cross-border transactions involving cryptocurrencies, it is advisable to consult with a tax professional who can guide you through the specific regulations.

Seek Professional Advice:

Given the complexities of cryptocurrency #taxation it is highly recommended to seek professional advice from a tax expert with experience in digital assets. They can help you navigate the intricacies of cryptocurrency tax regulations, ensure compliance, and optimize your tax strategy.

Conclusion

As #cryptocurrency continue to gain mainstream adoption, it is crucial to understand the tax implications of owning, trading, and using digital assets. Properly reporting and complying with tax obligations not only ensures legal compliance but also helps you avoid potential penalties and enjoy the benefits of a well-planned tax strategy. Stay informed, keep detailed records, and consult with tax professionals to ensure you are making informed decisions in the world of cryptocurrency taxation.

#uk #taxation #DeFi #staking

The new rules by UK Treasury aim to make it easier for people to pay taxes while making money from DeFi. Officers believe the new regulation will require less effort for people to transfer taxes.

The way people borrow and lend money on DeFi is being discussed. A new set of rules are coming regarding taxes in the UK. However, people in charge of taxes want to hear what others think about this idea.

The government wants to know what people investing in DeFi (a type of digital money) think about how taxes should work. People working in the field can share their views openly to include in the regulation. According to sources, the organization will seek their input by June 22.

If new rules are passed, people can use special online funds to buy things. Furthermore, they will not have to pay additional funds as they usually do.

This consideration is being put up to define certain criteria that are defined as “DeFi transaction.” For example, if someone uses cryptocurrency in a way that is not considered a DeFi transaction, they may be subject to taxes. Therefore, it is important to establish clear guidelines on what constitutes a DeFi transaction to avoid any loopholes regarding tax obligations.

A “DeFi transaction” must entail the transfer of crypto assets from a lender to a borrower or through a smart contract, where the borrower is required to return the tokens.

When someone lends something to someone, he should be able to withdraw as much as he gave. This is the same as if you have lent a toy to a friend, you want him back after finishing playing with him.

The government is trying to make it easier for those who lend and use digital money to pay their taxes. They want to make a plan that is less confusing for all. They can impose a new fee for people using digital money, so it is not very difficult to find out how much tax is outstanding on them.

The UK Treasury statement reads: “…the new tax framework could treat all DeFi returns as being revenue in nature and charged to a new miscellaneous income charge specific for crypto asset transactions.”

The discussion over tax regulation on DeFi staking and lending is part of the second phase of a five-step process. Once the officers finalize the inputs, they will prepare a legislative draft. After that, it will be implemented and monitored, and finally, reviewed and evaluated for the change.

nftstudio24.com