The implementation of the Finance Act, 2023 in Nigeria, which includes a provision for a 10% tax on gains from digital assets, including cryptocurrencies, has raised concerns among local stakeholders. The president of the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN), Obinna Iwunna, believes that the introduction of the tax is premature and highlights the need for clarity and infrastructure development before imposing such measures.
Iwunna emphasizes that the current uncertain climate, coupled with the Central Bank of Nigeria’s (CBN) restrictions on cryptocurrency transactions, makes it challenging to implement a tax on cryptocurrencies. He argues that there needs to be a collective understanding and recognition of cryptocurrency among regulatory bodies such as the Securities Exchange Commission (SEC), CBN, and the National Information Technology Development Agency (NITDA). Only with a unified definition can policymakers develop appropriate regulations, policies, and taxation measures.
The lack of consultation observed during the E-Naira launch is also mentioned, as it could hinder the adoption of tax laws. Iwunna suggests that collaboration with the digital assets ecosystem would have facilitated rapid adoption of the E-Naira by millions of Nigerians.
Stakeholders have reached out to the SEC and CBN regarding their concerns but are still awaiting a response. While discussions have taken place, no definitive decisions have been made. Stakeholders stress the importance of ensuring that taxation does not impede the growth of the cryptocurrency industry, considering the government’s aim to broaden the tax base.
In summary, Nigerian stakeholders in the blockchain and cryptocurrency industry find the implementation of the 10% tax on cryptocurrencies premature. They call for clarity, recognition, and infrastructure development before imposing taxation measures. Collaboration between regulatory bodies and the digital assets ecosystem is seen as essential for defining cryptocurrencies and formulating appropriate regulations. Furthermore, stakeholders emphasize the need to balance taxation with industry growth to ensure a sustainable and thriving cryptocurrency sector in Nigeria.