By 2023, the Nigerian government will start the taxation of cryptocurrencies and other digital assets if the proposed Finance Bill 2022 is approved.
According to Zainab Ahmed, Nigeria's minister of finance, budget and national planning, the bill is designed to achieve five fundamental policy drivers—tax equity, climate change, job creation and economic growth, tax incentives' reform and revenue generation & tax administration.
Ahmed said that the proposed bill clarified the taxation of cryptocurrency and other digital assets in line with the government's policy thrust of enhancing cross-border and international taxation of growing e-commerce with emerging markets.
Overall, the proposed bill will amend relevant taxes, excises and duty statutes in line with the macroeconomic policy reforms of the federal government.
Per TheCable, the National Economic Council has resolved to update the draft finance bill with additional inputs from state governors as the bill goes ahead to the Federal Executive Council (FEC) before the president sends it to the national assembly.
In February 2021, the Central Bank of Nigeria (CBN) announced a ban on cryptocurrency transactions in Nigeria, the bank directed financial institutions to close the accounts of persons or entities involved in cryptocurrency transactions within their systems.
However, in April 2022, Nigeria's Security Exchange Commission (SEC) moved to regulate cryptocurrencies and other digital assets. According to SEC, entities that intend to offer crypto-related services or products in Nigeria must secure a Virtual Asset Service Provider (VASP) licence.
SEC's openness to regulating crypto is contrary to the CBN's closeness. So, in February 2021, the SEC released a statement to explain that they do not see a contradiction with the CBN—whose job it is to regulate the banking system. But that their document was geared towards the fact "that trading in such assets [crypto] falls under SEC’s regulatory purview, except proven otherwise".
Despite the restriction on cryptocurrencies-related transactions in the banking sector in Nigeria, about 33.4 million Nigerians reportedly trade or own crypto assets.
Nigeria and Kenya have dropped out of the top ten countries globally that have adopted cryptocurrencies, according to the 2022 Global Crypto Adoption Index report released by Chainalysis, a blockchain analytics platform.
Nigeria, Africa's largest crypto market, moved from the 5th position in 2021 to the 11th position while Kenya dropped to 19th from 6th. Morocco, which was not in the ranking last year, overtook Kenya, Togo, South Africa and Ghana to presently occupy the 14th position.
Editor's Note: This is a developing story...