In a latest development, Nigeria plans to update its digital asset regulations to tax crypto transactions, according to a Bloomberg report. This change would bring all eligible crypto transactions on regulated exchanges under the tax system, which could generating significant revenue for the country.
A bill to create a framework for taxing crypto transactions and introducing other taxes is being reviewed by Nigerian lawmakers, with plans for adoption this quarter. The National Assembly reconvened for its 2025 session on January 14.
SEC Plans To Expand Crypto Licensing
The SEC acknowledged that cryptocurrency trading will bring in considerable tax revenue, but did not disclose the expected amount of revenue. It also plans to expand the scope of cryptocurrency exchange licenses, allowing residents to trade on regulated centralized exchanges for better monitoring and taxation. This move is expected to boost investor confidence.
In August 2024, Nigeria’s SEC issued its first crypto exchange license, marking a step toward clearer regulations. By September 2024, the SEC began cracking down on unregulated exchanges, with only two exchanges being officially regulated at that time.
SEC Updates Rules on Crypto Marketing
The SEC’s interest extends to crypto marketing as well. In December 2024, the SEC updated rules to address the issue of social media influencers promoting unregulated crypto products. Now, virtual asset service providers must get approval before working with third-party promoters to promote their crypto products.
Interestingly, Nigeria’s young, tech-savvy population has embraced crypto as a way to protect against inflation and the declining value of the naira. Since taking office in 2023, President Bola Tinubu has pushed for fiscal reforms to increase government revenue and reduce the deficit. Notably, Nigeria’s parliament recently approved a record 54.99 trillion naira ($36.4 billion) spending plan for 2025, further showing the government’s need for increased revenue streams.
Nigeria initially took a tough stance on crypto, banning financial institutions from working with crypto firms due to security concerns. However, the government lifted the ban in December 2023.
Now, Nigeria is focusing on growing its crypto market, recognizing its potential. The country’s move to introduce crypto taxation is a key step toward regulating the space. As crypto adoption continues to rise, the government is working to maintain a competitive edge while ensuring a secure environment for investors.
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