The Federal Government of Nigeria is set to introduce new tax laws by September that will include regulations for the cryptocurrency industry. The move comes as the industry continues to grow rapidly in the country, with an estimated value of up to $400 million and around 33% of the population holding one form of cryptocurrency.
Speaking at the FIRS 2024 Stakeholders Engagement with the Senate and House of Representatives Committees on Finance in Lagos, the Executive Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, highlighted the absence of current legal frameworks governing cryptocurrency in Nigeria, calling for the urgent need for regulation.
“While we cannot avoid cryptocurrency as there is no law in Nigeria presently regulating it, there is a need for a law that regulates this line of transaction. This is what is applicable in other countries of the world. When there are innovations of system, you must plan to regulate it in such a way that it is not injurious to economy development of Nigeria,” Adedeji said.
The forthcoming tax laws aim to overhaul the nation’s revenue administration, harmonize and simplify existing tax laws, and enhance services to support President Bola Tinubu’s economic plan. Adedeji noted that the current stamp duty tax law dates back to 1939, a time when there was no internet or connectivity, and called for the need to update the tax laws to reflect the current economic realities.
The National Assembly has been a strong supporter of the FIRS over the years, and Sen. Muhammed Musa, Chairman of the Senate Committee on Finance, expressed his support for the regulation of the cryptocurrency industry. He noted that the process would allow for the modification of tax laws that have been in place since before Nigeria’s independence.
“Considering technological advancements, cryptocurrencies have become a significant means of generating income, yet Nigeria lacks the necessary legal framework to govern this area,” Sen. Musa said.
The introduction of new tax laws for the cryptocurrency industry is a significant step forward for Nigeria. The move will provide clarity and certainty for businesses and individuals operating in the industry, while also helping to generate additional revenue for the government.
The Growth of the Cryptocurrency Industry in Nigeria
Nigeria’s cryptocurrency industry has experienced significant growth in recent years. Nigeria, one of the largest cryptocurrency markets in Africa, experienced a 9% year-over-year growth in cryptocurrency transaction volume reaching $56.7 billion between July 2022 and June 2023.
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The growth of the industry can be attributed to a number of factors, including the high level of internet penetration in the country, as well as the relatively young population. Many Nigerians are also looking for ways to hedge against inflation and protect their savings.
However, the lack of regulation has also created some challenges for the industry. There have been a number of cases of fraud and scams associated with cryptocurrencies. The new tax laws will help to address these challenges and provide a more stable environment for the industry to grow.
The Impact of the New Tax Laws on the Cryptocurrency Industry
The new tax laws will have a significant impact on the cryptocurrency industry in Nigeria. The laws will provide clarity and certainty for businesses and individuals operating in the industry. They will also help to generate additional revenue for the government.
However, it is important to note that the new laws will also increase the compliance burden on businesses and individuals operating in the industry. They will need to ensure that they are complying with all of the new rules and regulations.
Overall, the new tax laws are a positive development for the cryptocurrency industry in Nigeria. They will help to create a more stable and predictable environment for the industry to grow.
The Federal Government of Nigeria is set to introduce new tax laws by September that will include regulations for the cryptocurrency industry. The move comes as the industry continues to grow rapidly in the country. The new laws will provide clarity and certainty for businesses and individuals operating in the industry, while also helping to generate additional revenue for the government.
