Nigeria reportedly advances crypto tax plan while grappling with Binance dispute

Nigeria's crypto tax policy could reshape the digital asset landscape amid high adoption rates.

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

Nigeria’s Securities and Exchange Commission (SEC) is working on a plan to tax crypto transactions as part of a broader effort to increase government revenue, Bloomberg reported on Feb. 18.

According to the report, the regulatory body intends to bring eligible crypto transactions on licensed exchanges under the country’s tax framework. Meanwhile, a bill outlining the tax structure is under review and could be approved within the quarter.

While the SEC has not disclosed the expected revenue from this initiative, officials believe it will generate a significant amount because Nigeria is one of the leading countries in crypto adoption.

Some exchanges have already begun implementing tax measures. KuCoin, a major trading platform in Nigeria, started collecting a 7.5% value-added tax (VAT) on trading fees from its Nigerian users last year.

Meanwhile, industry experts suggest the taxation policy may indicate a shift in the government’s stance on crypto. Last year, the SEC implemented a licensing framework that issued provisional licenses to platforms like Busha and Quidax as registered virtual asset service providers (VASPs).

Ongoing Binance dispute

The tax development comes amid Nigeria’s ongoing standoff with Binance. Over the past year, authorities have clashed with the global exchange over regulatory compliance.

On Feb. 14, Nigeria’s Minister of Information and National Orientation, Mohammed Idris, dismissed bribery allegations made by Binance executive Tigran Gambaryan and urged the public to disregard them.

Gambaryan had claimed that Nigerian officials sought bribes from Binance representatives and denied accusations that crypto exchanges were manipulating the naira.

However, the authorities denied the allegations, saying:

“We categorically deny the retaliatory claims made by Mr. Gambaryan against Nigerian officials involved in his case, and we urge the public to disregard these false accusations in their entirety.”

The authorities also accused Binance of attempting to pay a $5 million deposit to secure Gambaryan’s release.

Ultimately, the government stated that it instead reached a diplomatic agreement with the US for his release on humanitarian grounds.

Mentioned in this article