Nigeria Aims to Tax Cryptocurrency Industry Due to Revenue Concerns

The Nigerian government is moving toward imposing taxes on the rapidly growing cryptocurrency industry. The Federal Inland Revenue Service (FIRS) plans to introduce a new tax administration bill to address this issue. Although Nigeria is a significant player in the global crypto market, it currently sees minimal tax revenue from these activities. The FIRS is now seeking the Nigerian National Assembly’s backing to implement these changes.

Addressing the Revenue Gap

According to a recent report, FIRS Chairman Zacch Adedeji revealed the proposal during a meeting with a joint committee of the Nigerian National Assembly. He emphasized the need to update Nigeria’s tax laws to reflect current economic realities, including the increasing use of cryptocurrency for trading, cross-border payments, and other financial activities. Despite Nigeria’s strong presence in the global crypto market, Adedeji noted that the country is not reaping the financial benefits from crypto-related transactions.

For instance, Central Bank of Nigeria Governor Olayemi Cardoso previously highlighted that Binance, a leading cryptocurrency exchange, reportedly generated $26 billion in revenue from Nigerian transactions. Some officials believe that Binance did not collect taxes on these transactions, depriving the country of significant revenue.

During his address to the joint committee, Adedeji acknowledged the importance of revamping Nigeria’s tax system to make it more efficient and inclusive of the crypto sector. “We cannot run away from the cryptocurrency ecosystem because it is the in-thing. But as it stands in Nigeria today, there is no law that regulates cryptocurrency operations,” Adedeji explained.

He also expressed confidence that, even with the proposed changes, the FIRS would still meet its ambitious revenue goal of $12.2 billion (19.4 trillion naira). Meanwhile, Senate Finance Committee Chairman Sani Musa praised Adedeji for his proactive approach and advocated for a unified tax collection agency. House Finance Committee Chairman Kalejaiye Paul also pledged his support for the FIRS’s initiatives.