Nigeria’s Securities and Exchange Commission (SEC) is moving to bring the booming cryptocurrency market under tax regulations. The SEC is developing new rules to tax eligible transactions on regulated crypto exchanges, according to a statement to Bloomberg. This aims to capture revenue from the increasingly popular crypto market, especially among Nigeria’s youth. While the SEC acknowledges the potential for substantial revenue, it hasn’t released specific projections.
This initiative comes as crypto trading surges in Nigeria, particularly as a hedge against high inflation and the falling naira. The SEC aims to create a regulatory framework that fosters growth while ensuring tax compliance.
Beyond taxation, the SEC is expanding crypto licensing to include permits for centralized exchanges. These platforms will offer better transaction oversight, making it easier to monitor and enforce tax rules. The SEC anticipates a shift towards these exchanges, as they offer greater investor protection.
A bill before the National Assembly outlines a framework for taxing crypto transactions and related levies. Expected to pass this quarter, it aligns with President Tinubu’s fiscal reforms, which prioritize boosting revenue and reducing the budget deficit. Since taking office, Tinubu has focused on overhauling tax administration and improving fiscal sustainability. The recent approval of a N54.99 trillion ($36.4 billion) spending plan for 2025 highlights this focus.
The SEC’s move follows its earlier efforts to regulate the sector. Last August, the SEC granted “Approval-in-Principle” to crypto exchanges Quidax and Busha under its Accelerated Regulatory Incubation Program (ARIP). Four other companies were also admitted to the SEC’s Regulatory Incubation (RI) Program. The SEC is reviewing other applications for both programs. This comprehensive approach demonstrates Nigeria’s commitment to balancing innovation with regulatory oversight in the evolving world of cryptocurrencies.
Credit: Bloomberg/Nairametrics (Text Excluding Headline)
