Regulatory Shift in Nigeria Impacts Crypto Transactions 🇳🇬
Signs of an immediate regulatory shift for cryptocurrency in Nigeria emerged on Wednesday as crypto exchange KuCoin announced it would begin charging a value-added tax on transactions beginning July 8. The exchange cited a “regulatory update” in the email it sent to customers.
KuCoin Introduces VAT on Crypto Trades
- KuCoin will start collecting a 7.5% VAT on transaction fees for Nigerian users from July 8, 2024.
- This tax applies to all transaction types on the KuCoin platform.
Previous Tax Attempts in Nigeria
- The 2023 Finance Act introduced a 10% capital gains tax on cryptocurrency profits, effective May 1, 2023.
- The Security and Exchange Commission classifies cryptocurrencies, security tokens, and non-security tokens as digital assets.
Uncertainty Over Tax Collection
- Experts predict difficulties in collecting capital gains tax due to ambiguity around crypto’s legal status in Nigeria.
- SEC has not provided a comment on the new VAT fee at KuCoin.
Implications for Nigeria’s Crypto Industry
- The introduction of VAT on crypto transactions could impact Nigeria’s $400 million crypto industry.
- Nigeria’s regulatory decisions influence investor confidence and market dynamics in one of Africa’s largest crypto markets.
SEC Requires Registration of Crypto Businesses
- Last month, the Security and Exchange Commission mandated crypto exchanges and traders to re-register within 30 days to regulate digital assets trading.
Hot Take: Prepare for Regulatory Changes in Nigeria 🚀
As Nigeria implements VAT on crypto transactions, be vigilant about regulatory updates to navigate the evolving crypto landscape in the country.
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