Nigeria Introduces Tax Framework for Cryptocurrency Transactions

TLDR

• Nigeria’s SEC is developing new regulations to tax cryptocurrency transactions on regulated exchanges
• A comprehensive crypto tax framework bill is expected to be approved in Q1 2025
• The country plans to issue full crypto exchange licenses this year for centralized platforms
• KuCoin has already implemented a 7.5% VAT on trading fees for Nigerian users
• Recent developments occur amid ongoing tensions between Nigerian authorities and Binance

The Nigerian Securities and Exchange Commission (SEC) is developing new regulations that will bring cryptocurrency trading and digital transactions under the country’s tax framework. The move comes as part of a broader initiative by President Bola Tinubu’s administration to increase government revenue and reduce the budget deficit.

The SEC is currently working on rules that will ensure all eligible transactions on regulated exchanges are included in the formal tax system. A bill outlining the framework for taxing crypto transactions and introducing other levies is before lawmakers and is expected to be adopted in the first quarter of 2025.

Some cryptocurrency exchanges operating in Nigeria have already begun implementing tax measures. KuCoin, a major trading platform in the country, started collecting a 7.5% value-added tax (VAT) on trading fees from its Nigerian users in 2024.

The Nigerian government’s push for cryptocurrency taxation comes at a time when the country’s young, tech-savvy population has increasingly turned to digital assets. Many Nigerians use cryptocurrencies as a hedge against high inflation and the naira’s steep depreciation against the dollar since mid-2023.

Along with the new tax regulations, the SEC plans to extend the scope of crypto licensing. This includes issuing permits that will allow residents to trade on formal centralized exchanges where transactions can be monitored and taxed.

The SEC expects a gradual shift toward centralized exchanges, citing increased protections and comfort for investors. This move aligns with the regulatory body’s efforts to create a more structured digital asset trading environment.

Fiscal Reforms

These developments are part of President Tinubu’s fiscal reforms since taking office in 2023. Last week, Nigerian lawmakers approved a 54.99 trillion naira ($36.4 billion) spending plan for 2025, highlighting the government’s focus on financial planning and revenue generation.

The SEC has already made progress in regulating the cryptocurrency sector. In 2024, the commission implemented a licensing framework that granted provisional licenses to platforms like Busha and Quidax as registered virtual asset service providers (VASPs).

Binance

The new tax initiative comes amid ongoing tensions between Nigerian authorities and Binance, one of the world’s largest cryptocurrency exchanges. Recent disputes have centered around regulatory compliance issues.

On February 14, 2025, Nigeria’s Minister of Information and National Orientation, Mohammed Idris, addressed allegations made by Binance executive Tigran Gambaryan. The minister denied claims that Nigerian officials had sought bribes from Binance representatives.

The government also countered Gambaryan’s assertions that crypto exchanges were not manipulating the naira. Officials stated that Binance had attempted to pay a $5 million deposit to secure Gambaryan’s release.

The situation was ultimately resolved through a diplomatic agreement with the United States, leading to Gambaryan’s release on humanitarian grounds.

While the SEC has not disclosed specific revenue projections from the new crypto tax framework, the initiative reflects Nigeria’s position as one of the leading countries in cryptocurrency adoption.

The move toward taxation and regulation of digital assets represents a shift in the government’s approach to cryptocurrency trading. This change comes as authorities seek to balance the growing popularity of digital assets with the need for oversight and revenue generation.

The latest regulatory developments indicate a more structured approach to cryptocurrency trading in Nigeria, with formal licensing and taxation frameworks being put in place for the digital asset market.

The post Nigeria Introduces Tax Framework for Cryptocurrency Transactions appeared first on CoinCentral.