Nigeria: FG Charges 10% Tax on Proceeds From Crypto Assets

FG Charges 10% tax on proceeds from Crypto Assets

Digital assets have transformed from been exempted from taxation to becoming chargeable assets, which will be taxed at the rate of 10%.

As part of the parting tax amendment by the departed administration, news has surfaced that the former President, Mohammadu Buhari signed the Finance Bill 2023 into law on 28 May 2023 as Finance Act, 2023.

The Finance Act, 2023 includes numerous tax reforms that are meant to help develop Nigeria’s framework, including introduction of 10% taxation on proceeds gotten from the sale of digital assets.

The taxation covers digital assets such as cryptocurrencies, non-fungible tokens (NFTs), and other tokenized assets.

Consequence of Taxation on Crypto Assets

Consequently, cryptocurrencies have now been granted legitimacy and recognition as assets with a potential for economic advancement, unlike in the past when there wasn’t regulations guiding the taxation of digital assets.

The sudden taxation shows that the government has become cognizant of the significant growth that the cryptocurrency world has experienced. Crypto assets are now worth a whole lot more than they used to.

It is clear that an imposition of tax on the proceeds acquired from the sale of crypto assets not only generate additional revenue for the government, it also helps to widen the tax base by extending taxation to industries that have been previously exempted.

However, the news has rocked the cryptocurrency world, as it wasn’t particularly a move that most people saw coming.

The Finance Act also has it that the deduction of capital losses on capital gains tax purposes, may be extended for a height of 5 years.

FG Charges 10% Tax on Proceeds From Crypto Assets: Experts Weigh In

Professionals have expressed different feelings towards the news of taxation on crypto assets.

According to the CEO of the crypto exchange app M7pay, Barnette Akomolafe, the taxation is a great move on the part of the government as it will help to bring legitimacy and recognition to crypto assets.

He also mentioned that the legislation will expedite the incorporation of digital assets into Nigeria’s current financial and regulatory framework.

On the contrary, an anonymous local crypto expert condemned the move, pointing out the adverse effects that it will have on the activities of crypto traders.

They also admonished that the government give unambiguous instructions and enlighten the public regarding the details of the taxation to ensure conformity.

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