The president of the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN) believes that the new taxation policies will be difficult to implement as it has been introduced too early.
Obinna Iwunna, the SIBAN president, weighed in on the new Finance Act, signed into law at the end of May, noting that the crypto tax laws are putting the card before the horse. According to Iwunna, the success of the law will be met with obstacles and will impact the adoption of cryptocurrency and blockchain in the country.
Just read that very soon you all will start paying taxes on your crypto and Forex profits in Nigeria.
10% of your capital gains goes to government 😳😳. What are we going to get in return?
— CryptoLord NE 📊📈 (@CryptoDefiLord) June 8, 2023
The new act brings in a series of tax reforms as part of updating the financial legal infrastructure in the country. The new framework includes a 10% tax for all gains generated from digital assets, including leading cryptocurrencies. Iwunna believes that this tax on cryptocurrency in the current financial climate is premature.
The Nigerian central bank is already at odds with cryptocurrency transactions, having told commercial banks to avoid processing any financial transactions that include cryptocurrencies. Iwunna suggested that since commercial banks do not facilitate cryptocurrency transactions, it doesn’t make sense to tax the asset as it doesn’t have the infrastructure in the country to process it.
According to Iwunna, cryptocurrencies involve security, overseen by the Nigerian Securities and Exchange Commission (SEC); current, overseen by the CBN; and technology overseen by the NITDA. While each authority plays an imperative part, having a full definition of how crypto fits into the fiscal system is important before creating legal barriers to regulate the industry. While Iwunna notes that he understands that the government is aiming to widen the tax pool, he noted that it’s important to put cryptocurrency growth and the industry’s adoption as a priority.