Nigeria’s FIRS seeks new law to regulate cryptocurrency from September 

The Executive Chairman of the Federal Inland Revenue Service (FIRS), Dr Zacch Adedeji, has announced that the Federal Government will introduce new tax laws by September, which will include regulations for the Nigerian crypto industry.

The FIRS chief announced this Saturday at the FIRS 2024 Stakeholders Engagement with the Senate and House of Representatives Committees on Finance at Eko Hotel and Suites, Victoria Island, in Lagos. 

Recall that the Nigerian crypto industry has seen a replete number of regulatory faceoffs all year. This has been largely driven by a lack of clear regulatory framework and direction. We reported in June that the crypto exchange KuCoin announced a VAT (value-added tax) on Nigerians’ crypto transactions.

Read: KuCoin to start collecting 7.5% tax on crypto transactions in Nigeria from next week

At that time, the details of the directive were unclear and there has not been any significant information on the move. 

It seems that the trajectory of the industry is about to change as Dr Adedeji, the country’s tax and revenue collection chief has noted the absence of a legal tax framework governing cryptocurrency trading and has called for urgent regulation.

More on FIRS’ new crypto direction

At the meeting, Dr Adedeji said the Federal Government would introduce new tax laws by September. Additionally, the nation’s tax master noted that these new laws would overhaul the process of Nigeria’s revenue administration, harmonize and simplify existing tax laws, and enhance services to support President Bola Tinubu’s economic plan.

“By the special grace of the Almighty God, we will bring a bill for a law to overhaul the whole process of revenue administration in Nigeria. 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”, the FIRS chief stated.

Now, new crypto laws will be introduced in the tax bill that will be introduced to the legislative assembly by September, according to the announcement by Dr Adedeji. 

“While we cannot avoid cryptocurrency as there is no law in Nigeria presently regulating it, there is a need for a law that regulates this line of transaction. This is what is applicable in other countries of the world. When there are innovations in the system, you must plan to regulate it in such a way that it is not injurious to the economic development of Nigeria.” he added.

Read also: #EndBadGovernance protest: Nigerian government blocks $38m funds in 4 crypto wallets

Since explicit details were not provided, the details of the anticipated crypto regulation are yet unclear. Some analysts believe that these may include taxation of cryptocurrency transactions, usage and ownership by the FIRS. 

What to expect?

Recall that in June, one of the popular crypto exchanges in Nigeria, KuCoin announced that it would begin to collect a 7.5% Value-Added Tax (VAT) on transaction fees from its users in Nigeria. Now, this new development might be a step to maximize cryptocurrency taxation in Nigeria.

One wouldn’t be too far from the truth to surmise in that direction because, in the meeting, Dr Adedeji further highlighted that the FIRS is on track to achieve the N19.4 trillion target set by the National Assembly at the beginning of the year.

Sen. Sani Musa, Chairman of the Senate Committee on Finance, stated that regulating the cryptocurrency industry is crucial for providing the country with appropriate legislation for tax collection and revenue generation.

He also noted that considering technological advancements, cryptocurrencies have become a significant means of generating income, yet Nigeria lacks the necessary legal framework to govern this area. 

Read also: President Tinubu appoints Zacch Adedeji as chairman of FIRS

But, with this proposed process, the new laws would allow for the modification of tax laws that have been in place since before Nigeria’s independence. The lawmaker expressed confidence that the Executive would submit the necessary bill after the Senate resumes recess, enabling amendments, repeals, and the re-enactment of laws that align with current trends.