The Nigerian Federal Inland Revenue Service (FIRS) plans to introduce legislation to tax the growing crypto sector, according to local media outlet Business Day.

FIRS Executive Chairman Zacch Adedeji announced this during a session with the National Assembly’s Finance Committees, highlighting that the new regulation would drive economic growth while encouraging innovation.

Adedeji emphasized that this initiative aims to modernize Nigeria’s outdated regulatory framework by incorporating new technologies previously unaddressed by existing laws.

Dare Adekanmbi, Adedeji’s special adviser on media reportedly stated:

“We need a law that regulates that area of our economy. This is why we are having this engagement with the legislators. We will regulate it in a way that is not injurious to the economic development of Nigeria.”

Industry experts have been urging the Nigerian government to adopt this approach for a number of years. In 2021, when the government banned financial institutions from interacting with the crypto space, Tayo Oyedeji, a university professor, suggested that emerging economies should prioritize taxation over prohibition. He said:

“Nigeria (a big crypto market) can make millions from crypto gains tax.”

Nigeria is one of the largest crypto markets in Africa. The Nigerian SEC Director General Emomotimi Agama recently said the country’s digital assets market is estimated to be worth over $400 million.

The legislative move comes as some crypto platforms begin collecting Value-Added Tax (VAT) on transaction fees. In July, KuCoin announced it would start charging a 7.5% VAT on all transaction fees in Nigeria.

Nigeria crypto

Meanwhile, the push for crypto regulation in Nigeria has intensified recently. Finance Minister Wale Edun urged the Securities and Exchange Commission (SEC) to prioritize regulatory clarity for the industry.

This follows a recent crackdown on crypto platforms, prompting global players like OKX to exit the Nigerian market.

Additionally, Binance is facing legal action from Nigerian authorities for alleged money laundering and tax evasion. Tigran Gambaryan, a Binance executive, is currently detained at the Kuje Correctional Centre in Abuja despite growing international calls for his release due to his deteriorating health.

However, Nigerian authorities assert that these actions are part of a broader effort to ensure compliance in the emerging industry

Mentioned in this article

South Korean lawmakers have proposed a bill to delay the implementation of crypto gain tax until 2028.

The ruling political party proposed the bill on July 12, citing the current negative sentiments around the crypto industry as the reason for the extension. They stated:

“With investment sentiment toward virtual assets deteriorating, some argue that hasty taxation of virtual assets is not desirable right now, as virtual assets are high-risk assets with a higher risk of loss than stocks, and if income tax is also imposed, most investors are expected to leave the market.”

Initially, South Korea planned to implement its crypto gain tax on January 1, 2025. However, if the new bill is passed, the implementation date will shift to January 1, 2028. The sub-committee met on July 15 to continue the review.

The move aligns with President Yoon Suk-yeol’s campaign promises. He assured voters he would extend the crypto gains tax during the last general election if elected. His administration aims to create a clear regulatory framework before implementing the tax.

However, the Ministry of Economy and Finance has not decided on the delay. The ministry plans to announce new tax policy amendments by the end of the month.

“No decision has been made regarding whether to further postpone the implementation of virtual asset income taxation,” a ministry spokesperson said.

South Korea’s thriving crypto industry

South Korea has one of the fastest-growing adoptions of the emerging industry globally.

During the first quarter of this year, blockchain platform Kaiko reported that the Asian country’s national currency, Won, emerged as the leading currency for global crypto trades, with a cumulative trade volume of $456 billion on centralized exchanges.

Furthermore, the Asian country is a shining light for its proactive approach to crypto regulation. South Korea has implemented several rules designed to enhance consumer protection standards for crypto users within its jurisdiction.