Published: 20/08/2024 - Author: Leexim AZC.NEWS
The Nigerian government is moving forward with plans to integrate cryptocurrency into its tax framework.
The Federal Inland Revenue Service (FIRS) is spearheading efforts to draft new tax legislation aimed at regulating and taxing the rapidly growing cryptocurrency sector. Despite Nigeria’s prominent role in the global cryptocurrency market, the country has so far collected only minimal tax revenue from crypto-related activities. To address this, FIRS is seeking legislative support from the Nigerian National Assembly.
Lack of Tax Benefits from Cryptocurrency Activities
Recent reports indicate that a new tax regulation bill targeting cryptocurrency activities is currently being developed. FIRS Chairman Zacch Adedeji presented this initiative to a joint committee of the Nigerian National Assembly as part of broader reforms aimed at modernizing the country’s tax system.
Adedeji emphasized the need for Nigeria to update its tax laws to better reflect the current economic landscape, which increasingly includes cryptocurrency transactions for cross-border trade and payments. Although Nigeria has a significant presence in both the African and global cryptocurrency markets, the country has yet to reap substantial tax benefits from these activities.
Nigerian Government Moves To Tax Cryptocurrency Transactions
To underscore the issue, the Governor of the Central Bank of Nigeria, Olayemi Cardoso, previously highlighted that Binance, a leading cryptocurrency exchange, facilitated $26 billion in transactions from Nigeria. However, some officials argue that the exchange has not been collecting taxes on behalf of the Nigerian government, leading to significant revenue loss for the country.
In his address to the committee, Adedeji acknowledged this concern and outlined plans to overhaul the tax system for greater efficiency.
“We cannot ignore the cryptocurrency ecosystem; it is a crucial part of the current economic environment. However, in Nigeria, there are currently no laws regulating cryptocurrency activities,” Adedeji remarked. He assured the committee that FIRS remains committed to achieving its revenue target of $12.2 billion (19.4 trillion naira) while considering necessary changes to the tax laws.
Meanwhile, Senate Finance Committee Chairman Sani Musa praised Adedeji for his collaboration with lawmakers and supported the idea of a unified tax collection agency. House Finance Committee Chairman Kalejaiye Paul also expressed his support for FIRS’s efforts.
