Crypto Tax Proposal
Currently in Nigeria, the Parliament has been presented with the Finance Bill. Through the bill, the Nigerian Government wishes to bring about several changes to the country’s tax net.
Several amendments have been suggested in the existing laws while several other provisions have been proposed to be incorporated.
In a nutshell, Finance Bill is the crux of enormous changes which would directly impact upon Nigerian economy and taxpayers.
However, the draft bill also contains special provisions which though pertain to taxation but involve digital currencies and assets.
Bringing Crypto under the Tax Net
Finance Bill has been introduced by Zainab Ahmed who is the Federal Minister of Nigeria for Finance, Budget, and National Planning.
Zainab is a highly qualified accountant by profession and had been looking after the affairs of the Finance Ministry since 2019.
In the Finance Bill, Zainab has proposed to amend the existing tax regimes such as duties and excise. However, the scope of the Finance Bill extends even to digital currencies, assets, and digital transactions.
Crypto Tax In Line With Government’s Ambition
She suggested that Nigeria desperately needs to bring digital currencies and transactions thereof into the tax net.
She emphasized that tax on crypto is in line with the wider ambition of the Nigerian Government towards the collection of additional taxes.
If Nigeria implements a crypto tax then it will be able to join other African member states where crypto is already taxed.
For instance, South Africa and Kenya are the top most African states where crypto trading, gains, and transactions are duly taxed. This fact was also confirmed by The Cable in its recently published report.
The Cable is a privately owned and operated social media and news platform in Nigeria which enjoys huge readership and viewership.
Cable’s report also mentions names of countries where crypto tax has been implemented recently such as the US, UK, etc.
Finance Bill Defines “Chargeable Assets” and “Properties”
Zainab also revealed that the Finance Bill also comprises amendments that define in detail the chargeable assets.
She pointed out that under the proposal, Chargeable Assets have been defined to mean ‘properties’ that can be classified as assets.
She clarified that ‘properties’ mean assets, including properties, debts, options, digital currencies, and assets, whether held locally or outside.
The Cable further notes that Zainab had provided her comments on the draft bill. Later, the bill was further debated and commented upon by Nigerian state governors.
It has been reported in the Nigerian local press that the comments of state governors also have been made part of the bill.
After obtaining all relevant comments, the same shall then be handed over to Federal Executive Council (FEC).
FEC shall record its observations and forward them with the bill to Nigerian National Assembly for further discussion, debate, and decision.
Meanwhile, the crisis relating to the AAX crypto platform hasn’t ended yet. Users of AAX, which include members, investors, creditors, etc. are still unclear about what went wrong with the firm.
There is still no communication between AAX Nigeria and the firm’s headquarter in Hong Kong.
Users are fearing that they may have been defrauded by the exchange since nobody is updating them on the issue of withdrawals.
It was on 11th November when customer withdrawals were suspended and customers were told that they shall be updated timely. To date, no update has come.
Although Nigeria is implementing a tax rule on cryptocurrencies, it is also going to play a major role in controlling the crypto sector in the country.
The recent AAX incident is an eye-opener not only for the crypto investors in Nigeria but also for the Nigerian government.
They have to ensure that they have strict policies in place that also include the activities of the cryptocurrency exchange brokers operating in Nigeria.
This way, Nigeria can avoid a situation such as the AAX exchange crisis.