The Securities and Exchange Commission (SEC) is developing new regulations to bring cryptocurrency transactions under the formal tax system in Nigeria. This initiative aims to generate revenue from digital asset trading, which has seen a surge in adoption among the country’s tech-savvy population.
The SEC is working to ensure that all transactions on registered cryptocurrency exchanges comply with tax requirements. While the commission acknowledges the potential for substantial tax revenue from crypto trading, it has not disclosed specific projections.
Cryptocurrencies continue to gain popularity in Nigeria, with many investors using them as a hedge against inflation and currency depreciation. To improve oversight, the SEC is expanding its licensing framework, enabling more exchanges to operate legally under stricter regulations. This initiative is expected to enhance transaction monitoring and strengthen compliance with tax laws.
“We anticipate increased adoption of centralized exchanges as they provide better security and regulatory protections for investors,” the SEC states.
Legislative Framework for Crypto Taxation
A bill establishing a legal framework for taxing cryptocurrency transactions is currently under review at the National Assembly. Lawmakers are expected to pass the legislation within the quarter, aligning with the government’s broader fiscal reforms.
President Bola Tinubu’s administration prioritizes strengthening Nigeria’s tax system and increasing government revenue. The recent approval of a N54.99 trillion ($36.4 billion) budget for 2025 underscores the government’s commitment to economic sustainability through enhanced taxation measures.
Expanding Regulatory Oversight
In August 2024, the SEC granted preliminary approval to two cryptocurrency exchanges, Quidax and Busha, under its Accelerated Regulatory Incubation Program (ARIP). This move signals Nigeria’s readiness to regulate digital assets within a structured framework.
Additionally, four other firms—Trovotech Ltd, Wrapped CBDC Ltd, Dream City Capital, and HousingExchange.NG Ltd—are undergoing regulatory testing under the SEC’s Regulatory Incubation (RI) Program. The commission confirms that more applications are under review, with approvals being granted on a case-by-case basis.
Impact on the Cryptocurrency Industry
With stricter tax regulations and licensing requirements, cryptocurrency exchanges operating in Nigeria must comply with new financial reporting standards. This development is expected to reshape the industry, encourage formalized trading, and boost investor confidence.
As regulatory oversight increases, crypto traders and businesses will need to adjust to changes affecting transaction costs and tax obligations.
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