The Nigerian government has announced that if its proposed Finance Bill 2022 is approved, it will start taxing cryptocurrencies and other digital assets in 2023.
According to the bill’s amendment to the section on Chargeable Assets, “subject to any exceptions provided by this Act, all forms of property shall be assets for the purposes of this Act, whether situated in Nigeria or not, including options, debts, digital assets, and incorporeal property generally.”
Despite having one of the highest crypto adoption, Nigeria has had a rocky relationship with cryptocurrencies. The Central Bank of Nigeria (CBN) ordered Nigerian banks to close the accounts of cryptocurrency traders or other entities involved in transactions using their systems last year. It warned that they are used to finance illicit activities, and fined banks for facilitating crypto-related transactions. The Securities and Exchange Commission (SEC) announced about eight days ago that it will push “sensible digital assets, not cryptocurrencies” in its campaign to encourage the adoption of digital assets nationwide. Despite the government’s harsh stance towards cryptocurrencies and its harrowing treatment of cryptocurrency users, the proposed bill did not exempt cryptocurrencies from taxation as digital assets.
The Finance Ministry wants to tax cryptocurrencies and other digital assets in order to capture all economic sectors, including international e-commerce, in the tax net. The National Economic Council (NEC) has given the bill the go-ahead. Now it is on its way to the Federal Executive Council, the president, and the National Assembly for consideration.
If it is approved, Nigeria will join Kenya and South Africa as one of the African countries that tax crypto assets.
