- New VAT fee will take effect on July 8
- VAT will be on the transaction fee and not the total amount
- KuCoin among crypto websites banned in Nigeria
KuCoin, one of the leading crypto exchanges used by Nigerians, has said it will begin to charge a 7.5% Value Added Tax (VAT) fee on trades executed by its users whose Know Your Customer (KYC) is registered in Nigeria.
In a post on X, the exchange described it as a “regulatory update that impacts our users from Nigeria,” and stated that the new measure will take effect from July 8th, 2024.
“Starting from July 8th, 2024, we will begin collecting a Value-Added Tax (“VAT”) at a rate of 7.5% on transaction fees in each trade for users whose KYC information is registered in Nigeria,” the post read.
The exchange clarified that the “7.5% is only charged on the 0.1%/0.05% transaction fee and not your total amount, which will be remitted,” adding that the “VAT will be applied to the transaction fees in each trade, not the transaction amount, and covers all transaction types on KuCoin platform.”
To make it clearer, the exchange provided an example:
“Transaction: Buy 1,000 USDT worth of BTC
Fee: 1 USDT (0.1% fee rate)
VAT/Tax: 0.075 USDT (7.5% of the fee)
Net Amount for Transaction: 998.925 USDT”
Regulatory upheavals in Nigeria
Crypto regulation in Nigeria has been on the front burner in the recent past. The Nigerian government has been looking for ways to revive its poorly performing currency, Naira, and and has blamed many crypto exchanges for the currency’s misfortune despite its poor economic policies. This has led to the clampdown on Binance (the government sued Binance for tax evasion) and the exchange’s decision to delist all naira pairs.
Nearly all crypto websites are banned in Nigeria, including KuCoin. So, the new move by KuCoin is quite unclear since its Nigerian users do not have access to the platform unless they use a virtual private network (VPN).
Stakeholders have also raised concerns about the possibility of fraud in the absence of a clear regulatory stance in the country.
According to Cointelegraph, Lucky Uwakwe, president of the Blockchain Industry Coordinating Committee of Nigeria (BICCoN), has raised queries about potential transparency issues with the levy.
He also raised questions about how authorities in Nigeria will ascertain the number of users on the platform, confirm the volume of trade and how the exchange will remit the VAT, given the Central Bank of Nigeria’s (CBN) restrictions on crypto-to-fiat transactions in the country.
4 things to know about ‘failed’ $DAVIDO meme coin
Meanwhile, TheRadar earlier reported that Afrobeats superstar David Adeleke, popularly known as Davido, launched his own meme coin.
However, the euphoria didn’t last long as the coin failed spectacularly for a number of reasons which is not unrelated to Davido offloading 121.88 million $DAVIDO for 2,791 SOL to make $474,400 instantly.
