According to local media reports, Nigeria’s tax agency FIRS is seeking support from Congress to enact a new set of laws to regulate cryptocurrencies. The Executive Chairman of FIRS, Zacch Adedeji, is rumored to have made this announcement at a recent meeting with the National Assembly Finance Committee.

FIRS plans to introduce draft legislation in September. Adedeji said that the new bill will address the emerging cryptocurrency industry issues and ensure that the Nigerian economy takes advantage of its advantages while reducing potential risks.

Background of the bill: local regulation intensifies, international exchanges flee, and people sue the government for infringement

In Nigeria, severe inflation in recent years has led to a decline in purchasing power, causing the country to drop from Africa's largest economy to fourth place. At the same time, in view of the problems of currency depreciation and insufficient financial infrastructure, many people prefer to use cryptocurrency as an asset reserve.

According to a sample survey, Nigeria’s cryptocurrency holdings ratio is 47%, much higher than Japan’s 6% and the United States’ 18%.

However, in recent years, the local cryptocurrency industry has encountered the most serious regulatory problems, such as OKX announcing that it will withdraw from the country's market, the Central Bank of Nigeria accusing Binance of manipulating the exchange rate, and Binance executives fleeing Nigeria after suing Binance for tax evasion. . The new bill from the Federal Tax Service comes at a time of tense relations.

A few days ago we reported that Nigerian Bitcoin enthusiast and political advocate James Otubor had filed a lawsuit against Nigerian government units over cryptocurrency regulation. His appointed lawyer pointed out that what the government did to cryptocurrency holders not only violated the Nigerian Constitution, but also seriously violated the people’s property rights guaranteed by Article 14 of the African Charter on Human and Peoples’ Rights.

(Fight for cryptocurrency property rights! Nigerian people file lawsuit against government)

Improving old laws to meet the needs of the new era of cryptocurrency

Zacch Adedeji stressed the importance of regulating cryptocurrencies, noting the need for a clear and comprehensive set of rules to protect the economy. He called on FIRS and legislators to collaborate in drafting and implementing the proposed bill.​

The new legislation focuses on cryptocurrencies and aims to simplify and modernize existing tax laws, some of which are outdated and no longer suitable for the needs of today's digital world. This proposed reform of the tax system comes at a time when the Nigerian government is increasingly recognizing the importance of cryptocurrencies.

In other words, the new legislation is not really about rewriting a new tax code, but rather revamping the existing tax code to meet today's needs. On July 9, Nigeria’s Finance Minister and Coordinating Minister for the Economy, Wale Edun, urged the newly formed Securities and Exchange Commission board of directors to address the complexities of cryptocurrency regulation.​

With the new chairman of Nigeria’s SEC taking office, will the government’s regulatory attitude take on a new look?

The Nigerian Securities and Exchange Commission has taken steps to amend its rules regarding the issuance, provision of platforms, trading and custody of cryptocurrencies. These amendments aim to strengthen the regulatory framework so that it can better adapt to the evolving digital asset market. Nigeria’s President Bola Tinubu approved the appointment of SEC Chairman on April 19, 2024, which could mark a new era of financial regulation in the country. The new SEC is expected to play a key role in future regulatory transformation.

At the same time, the cryptocurrency community also urges the Nigerian government and regulatory agencies to adopt responsible supervision of digital assets rather than resorting to suppression.

This article Nigeria’s tax authorities proposed new legislation, which is expected to make crypto regulation clearer and friendly. It appeared first on Chain News ABMedia.