What You Need To Know About The Proposed Crypto Taxation in Nigeria

Despite the government’s harsh stance towards cryptocurrencies-related transactions in the banking sector in Nigeria, about 33.4 million Nigerians, which accounts for 35% of the population aged 18 to 60, reportedly trade or own crypto assets.

This amount is so significant that the Nigerian Government wants to have a share of it, through its proposed Financial Bill 2022.

According to Nigeria Financial bill’s amendment to the section on Chargeable Assets, “subject to any exceptions provided by this Act, all forms of property shall be assets for the purposes of this Act, whether situated in Nigeria or not, including options, debts, digital assets, and incorporeal property generally.” 

Zainab Ahmed, Nigeria’s minister of finance, budget and national planning, said,  “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.”

In spite of the government’s frowning against cryptocurrency and the harrowing treatment of cryptocurrency users, the proposed legislation did not exempt cryptocurrencies from taxation. 

Upon approval of Finance Bill 2022, the Nigerian government is expected to tax cryptocurrencies and other digital assets by 2023. By doing so, the country would join its counterpart, Kenya (the first country to extend financial regulation to cryptocurrency) as one of the African countries that tax crypto assets. 

It can be recalled that on Nov. 21st, 2022, Kenya published an amendment to the Kenyan Capital Markets Law which forces anyone who holds or deals in cryptocurrencies to provide information on their operations to the country’s Capital Markets Authority for tax purposes. 

The National Economic Council (NEC) has given the bill the go-ahead. Now it is on its way to the Federal Executive Council, the president, and the National Assembly for consideration. 

Overall, the proposed bill will amend relevant taxes, excises and duty statutes in line with the macroeconomic policy reforms of the federal government.