Nigerian move on crypto tax is premature Local Actors

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The President of the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN), Obinna Iwunna, commented on the implementation of the Finance Act 2023, which was signed into law on May 28. According to Iwunna, the successful enforcement of the law difficult due to its premature introduction.

The law introduces a series of tax reforms aimed at modernizing the country’s tax framework. Among its provisions was the introduction of a 10% tax on gains from the disposal of digital assets, including cryptocurrencies.

In an interview with Cointelegraph, Iwunna criticized the introduction of a 10% tax on cryptocurrencies in the current uncertain climate, likening it to putting the cart before the horse. He highlighted the continuing problem with the Central Bank of Nigeria (CBN) ordering commercial banks not to facilitate financial transactions involving cryptocurrencies.

As commercial banks still cannot process cryptocurrency transactions, he wondered how taxing something that is not recognized or defined is possible, stressing the need for clarity and enabling infrastructure before imposing. taxes. In support of this, Iwunna referenced how the Nigeria National Information Technology Development Agency (NITDA) defined blockchain technology through a collaborative effort and formulation of a national policy.

Iwunna pointed out that cryptocurrency involves security, currency and technology, overseen by Nigeria’s Securities and Exchange Commission (SEC), CBN and NITDA respectively. Each entity has a specific role to play, but a holistic and unified understanding of cryptocurrency is crucial. Once a collective definition is established, policy makers can craft appropriate policies, regulations and fiscal measures.

When asked if Nigerian crypto stakeholders have approached the SEC and CBN with their concerns, Iwunna confirmed that they have reached out and are currently awaiting a response. Although some discussions have taken place, no final decision has been made.

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Acknowledging that governments aim to broaden the tax base, Iwunna said it is important to ensure that taxation does not impede the growth of the cryptocurrency industry. Clarification is sought regarding the implications of taxation and its connection to cryptocurrency recognition and associated procedures.

According to Iwunna, the lack of consultation, as observed during the launch of e-naira, can hinder the passage of tax laws. Had there been collaboration with the digital asset ecosystem, e-naira could have been rapidly adopted by millions of Nigerians.

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