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Business News of Wednesday, 7 June 2023


After banning crypto trading, FG moves to tax, bitcoin, and other digital assets

The photo used to illustrate the story The photo used to illustrate the story

On May 28, 2023, former President Muhammadu Buhari signed the 2023 Finance Act into law before he exited office on May 28, 2023.

The Finance Act introduced a series of tax reforms to modernize Nigeria's fiscal framework.

Of the provisions in the Act is the introduction of a 10% tax on proceeds from the disposal of digital assets, including cryptocurrencies.

The move means Nigeria recognizes digital assets' increasing influence and economic prospects while ensuring the tax system aligns with the changing landscape.

The 2023 Finance Act is comprehensive legislation seeking to enhance fiscal transparency, boost revenue generation, and promote economic growth.

Nairametrics reports that the Act seeks to rein in revenue from recognized digital assets like cryptocurrencies and bring them into the purview of taxation.

Also, the Nigerian government wants to create a level playing ground to ensure that they contribute to Nigeria's revenue generation and development.

The move demonstrates Nigeria's readiness to adapt to its fiscal policies, realities and accelerate technological advancements and the changing landscape of financial transactions.

The determination to impose a tax on the proceeds of digital assets shows the government's recognition of the economic promise of cryptos. There has been remarkable growth in the global cryptocurrency industry in recent years.

By taxing proceeds from digital assets, the Nigerian government seeks to capture a part of the economic value made from these transactions, contributing to the country's overall revenue drive.

The introduction represents a step toward broadening Nigeria's tax base. Other taxes on the 2023 Finance Act are the personal income tax act, the tertiary education fund tax, customs, excise tariff, and excise duties for the fiscal year.

TheCable reports that before the 2023 Finance Act, the Nigerian government had published the fiscal policy measures, which outline the rates of taxes and excise duties for the fiscal year.

The new measures consisted of supplementary protection measures, revised excise duty rates, and green taxes and were approved by Buhari.

The former Minister of Finance, Zainab Ahmed, had said that the Nigerian government was planning to tax cryptos and other digital assets.

She said the plan aligns with the government's policy initiatives of boosting cross-border and international taxation and growing e-commerce with emerging markets.

On May 2023, The federal government approved the national blockchain policy, allowing blockchain technology to lift the ban on cryptocurrency in Nigeria.