Nigeria Imposes 10% Tax on Capital Gains from Crypto
Legislators in Nigeria have implemented new laws on local cryptocurrency trading practices. The new regulations have now levied a 10 percent tax on the cryptocurrency market for capital gains.
These legislative amendments are directed towards upgrading the fiscal policy, boosting the national revenue of the nation, and also granting cryptocurrencies a legal trade product status. Mohammad Buhari signed the law into practice as the last act before leaving his office.
These regulations are part of other tax reformation acts that are set to update the existing fiscal policy of the nation. The policy to impose 10 percent taxation on cryptocurrency trading is part of the overall fiscal framework.
It means that the cryptocurrency investors hailing from the region must pay taxes on their crypto reserves whenever they decide to dissolve their positions to realize profits. The capital gains tax is imposed on cryptocurrencies that fall under the digital asset umbrella.
Nigeria Recognizes the Growing Trend of Cryptocurrency Trading in the Region
The government of Nigeria intends to recognize cryptocurrencies as legally recognized trading assets. Such that the region has levied taxes on the asset class after realizing the increasing uptake in cryptocurrency trading volume among its citizens.
At the same time, the country also intends to use the funds collected from cryptocurrency investors to increase national revenue.
To this end, the government of Nigeria has also taken steps to improve its current financial infrastructure. However, the local cryptocurrency traders and the commercial sector may have mixed feelings concerning the new legislative changes taking place in the country.
M7pay CEO, Barnette Akomolafe, has claimed that the new taxation laws are seen as a recognition of the cryptocurrency sector and its integration into the financial ecosystem of Nigeria. Back in 2021, the Central Bank of Nigeria imposed commercial bank exodus on cryptocurrency exchange interactions.
Cryptocurrency stakeholders hailing from Nigeria told the media anonymously to talk about the changing landscape of the sector. The source maintained that new taxation can pose some challenges to the growth and development of the local crypto sector.
These issues surround various aspects of digital currencies such as transaction history, valuation of the financial assets, and international trading complications. The source also emphasized the need of imposing better policies and offering support to the taxpayers.
There are many cases, where government institutions and lawmakers have proceeded to implement new taxes on cryptocurrency investment. However, in most cases, the financial regulators have not introduced detailed and favoring regulations to protect the interests of the cryptocurrency sector and investors.
Meanwhile, crypto entities and the retail sector also remain skeptical about the lack of clarity on the requirement of government institutions to share the personal and financial data of their users.
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