- The regulation is an executive bill, not initiated by lawmakers
- The law will modernise revenue administration, including establishing a legal framework for crypto regulation
- The bill will undergo legislative processes soon
In its drive to increase revenue, Nigeria is preparing a draft regulation that would allow it to tax cryptocurrencies and digital assets in the country.
The head of the country’s principal revenue collection agency, the Federal Inland Revenue Service (FIRS), Zacch Adedeji, said the draft regulation is being drafted and will be sent to the national assembly to go through legislative processes soon. He said the bill seeks to modernise revenue administration, including establishing a legal framework for crypto regulation.
In a statement issued by his special adviser on media, Dare Adekanmbi, Adedeji acknowledged that interaction with the cryptocurrency ecosystem is inevitable. “We cannot run away from the cryptocurrency ecosystem because it is the in-thing. But as it stands in Nigeria today, there is no law that regulates cryptocurrency operations, Adedeji said.
“We need a law that regulates that area of our economy. This is why we are having this engagement with the legislators. We will regulate it in a way that is not injurious to the economic development of Nigeria.”
The crypto regulation is part of the country's overhaul of its revenue collection system, which aims to reduce reliance on oil earnings. Adedeji was made head of the agency when Bola Tinubu, the country’s president, took over power mid last year. The goal of the new executive is to close loopholes in the current revenue laws.
“Part of what we intend to achieve with this is to harmonise revenue collection, making tax laws very simple to understand and to be in tune with our current realities. For example, the Stamp Duty Act was made in 1939 when there was no internet connectivity… So, we need to bring that law up to date,” he said.
Authorities in Nigeria have clamped down on the crypto space: banks have been asked to block crypto traders' accounts, and security forces have arrested and charged Binance officials with tax evasion.
The excuse the authorities always give for the clampdown is that cryptocurrencies are used for terrorism financing and money laundering.
Nigerian government freezes $37M crypto assets of alleged #EndBadGovernance protest organisers
Meanwhile, TheRadar earlier reported that through its anti-graft agency, the Economic and Financial Crimes Commission (EFCC), the Nigerian government has reportedly frozen over $37 million worth of crypto assets traced to the organisers of the recently concluded #EndBadGovernance protest. This is per a Premium Times report.
On August 9, 2024, Justice Emeka Nwite of the federal high court sitting in Abuja ordered the accounts frozen based on the EFCC's application.
The EFCC had brought the application on August 8, in which the anti-graft agency described the crypto assets as proceeds of terrorism financing and money laundering.
