The Securities and Exchange Commission (SEC) is developing new regulations to bring cryptocurrency transactions under Nigeria’s formal tax system. The move aims to capture tax revenue from the country’s growing crypto sector, which has become a popular investment choice among its youthful and tech-savvy population.
According to a report by Bloomberg, the SEC confirmed in an email response that the proposed rules will ensure that all eligible transactions on regulated cryptocurrency exchanges are taxed. While the commission did not specify the expected revenue, it acknowledged the significant tax potential of the industry.
Cryptocurrency trading has surged in Nigeria, largely driven by economic instability, high inflation, and the steep depreciation of the naira since mid-2023. In response, the SEC is working to expand cryptocurrency licensing by issuing permits that will allow residents to trade on formal, centralized exchanges.
SEC believes these centralized exchanges will provide better transaction monitoring and improve tax compliance.
“We anticipate gradual traction toward centralized exchanges because they will provide greater protections and comfort for investors,” the SEC stated.
A bill outlining a framework for taxing cryptocurrency transactions is currently before the National Assembly. The legislation, expected to be passed this quarter, will introduce taxation and other levies on crypto-related activities.
This move aligns with President Bola Tinubu’s fiscal reforms, aimed at increasing government revenue and reducing Nigeria’s budget deficit. Since assuming office in 2023, Tinubu has prioritized tax administration overhauls and fiscal sustainability.
Last week, lawmakers approved a 2025 spending plan of N54.99 trillion ($36.4 billion), highlighting the government’s focus on revenue generation.
In August 2024, the SEC granted Approval-in-Principle to two cryptocurrency exchanges, Quidax and Busha, signaling its readiness to regulate the sector. The approval was issued under the Accelerated Regulatory Incubation Program (ARIP).
Additionally, four firms were admitted into the Regulatory Incubation (RI) Program to test their models and technologies under SEC supervision. These firms include:
- Trovotech Ltd
- Wrapped CBDC Ltd
- Dream City Capital
- HousingExchange.NG Ltd
The SEC clarified that these are not the only applicants, as other companies are still being assessed. Approvals will be granted on a case-by-case basis once applicants meet the regulatory requirements.
The introduction of crypto taxation is a major step toward formalizing digital asset trading in Nigeria. While it may increase compliance costs for traders and investors, it also provides a structured framework that could lead to greater market stability and security.
As the regulatory landscape continues to evolve, Nigerian crypto traders will need to stay informed and comply with new tax obligations to avoid penalties.
Stay ahead with the latest news on global innovation, leadership, entrepreneurship, business, and tech. Join us on WhatsApp or Telegram for real-time updates. Have a report or article? Send it to report@theinnovationtimes.com.
Follow us on X (Twitter), Instagram, LinkedIn, Pinterest and Facebook for more insights and trends
