Richard

United

April

Read

Gains

One of the popular crypto exchanges in Nigeria, KuCoin has announced that it will begin to collect a 7.5% Value-Added Tax (VAT) on transaction fees from its users in Nigeria.&nbsp; 
According to an email sent to its users on Wednesday, the new tax regime will be effected starting next week on Monday (July 8). The 7.5% VAT will be deducted from the transaction fees of crypto transactions of users whose KYC information is registered in Nigeria. 
In 2022, Nigeria indicated plans to tax crypto in the Finance <a href="https://uubo.org/wp-content/uploads/2023/02/TAX-SERIES-HIGHLIGHTS-OF-THE-FINANCE-BILL-2022.pdf" target="_blank" rel="noopener">Act</a> which was revised to include a 10% tax on profits from digital assets, including cryptocurrencies, although not much had been heard about it since then until now.&nbsp; 
“Subject to any exceptions provided by this Act, all forms of property shall be assets for this Act, whether situated in Nigeria or not, including options, debts, digital assets, and incorporeal property generally.” The act says. 
Read also: <a href="https://technext24.com/2024/06/16/3-years-after-enaira-struggles-adoption/">Almost 3 years later, Nigeria’s digital currency, eNaira struggles for adoption</a> 
Albeit having a mixed and somewhat contradictory approach to crypto and blockchain, the Nigerian authorities might be taking the first step towards enforcing the tax directive outlined in the Finance Act by imposing the 7.5% VAT on crypto transactions. 
<h4 id="kucoin-7-5-tax-all-you-need-to-know" class="wp-block-heading"> KuCoin 7.5% tax: All you need to know&nbsp;</h4> 
According to the circular to customers, starting next Monday, KuCoin will collect a Value-Added Tax (VAT) at a rate of 7.5% on transaction fees in each trade for users whose KYC information is registered in Nigeria. 
The exchange stressed that the VAT will be applied to the transaction fees in each trade, not the transaction amount, and covers all transaction types on the KuCoin platform.&nbsp; 
<div class="wp-block-image"> 
 <figure class="aligncenter size-full is-resized">
 <img loading="lazy" decoding="async" src="https://technext24.com/wp-content/uploads/2024/07/7117fa34-b1a9-46c4-b94b-f413261eb473.jpeg" alt="KuCoin directive" class="wp-image-233184" width="546" height="716">
 </figure>
</div> 
In practical terms, if a trader purchases 1,000 USDT worth of BTC with a transaction fee of 1 USDT the VAT will be 0.075 USDT (7.5% of the fee) and the next amount for the whole transaction will be 998.925 USDT. 
However, it is unclear if this directive is emanating from the Federal Inland Revenue Service (FIRS) or regulatory authorities like the Securities and Exchange Commission (SEC). Also, it is unclear how KuCoin plans to remit the taxes to the Nigerian authorities as there is still a ban against the transaction of cryptocurrencies in the country.&nbsp; 
Some of the countries where crypto is taxed via different ways like Capital Gains Tax, Income Tax and Wealth Tax <a href="https://koinly.io/blog/crypto-tax-world/" target="_blank" rel="noopener">include</a> the United States, United Kingdom, Australia, Canada, Germany, Ireland, Switzerland, France, Spain, Austria, and The Netherlands. 
<h4 id="crypto-in-nigeria" class="wp-block-heading">Crypto in Nigeria&nbsp;</h4> 
Nigerian authorities have adopted a somewhat confused and contradictory stance on crypto regulation. Since the beginning of the year, authorities have been clamping down on crypto exchanges and peer-to-peer trading platforms, in what they term a crackdown on naira manipulators.&nbsp; 
Related post: <a href="https://technext24.com/2024/06/26/faceoff-binance-blockchain-investors/">Prolonged face-off with Binance will scare investors and founders – Nigerian blockchain group</a> 
KuCoin, the exchange which made this announcement, is among the crypto exchanges under scrutiny by the Nigerian government. 
Earlier in May, the platform had to shut down its peer-to-peer platform, bowing to regulatory pressure. The Nigerian authorities have also been in a prolonged legal battle with the largest crypto exchange in the world, Binance, which led to the detainment of two of the exchange’s executives.&nbsp; 
<div class="wp-block-image"> 
 <figure class="aligncenter size-full">
 <img loading="lazy" decoding="async" width="1412" height="936" src="https://technext24.com/wp-content/uploads/2024/04/Screenshot-2024-04-04-at-16.19.26.png" alt="Nigeria arraigns detained Binance executive for tax evasion, laundry of $35m" class="wp-image-229745">
 <figcaption class="wp-element-caption">
 Tigran Gambaryan sits as he waits to face prosecution for tax evasion and money laundering at the federal high court in Abuja, Nigeria April 4, 2024. REUTERS/ Abraham Achirga
 </figcaption>
 </figure>
</div> 
Although Richard Teng, Binance CEO had earlier claimed he was working closely with the Nigerian government to resolve the situation, he later announced that the Nigerian authorities were demanding bribes from its detained executives to make the money laundering trial initiated against them go away. 
This context makes the new development from KuCoin more confusing. The regulatory authorities will have to explain their stance as an item that is banned cannot be taxed.

KuCoin to start collecting 7.5% tax on crypto transactions in Nigeria from next week

Technext.ng

Άλλα άρθρα που δημοσιεύτηκαν στις 4 Ιουλ 2024

Bitcoin Price Falls Under $60,000

Bitwise Nears Launch of Ethereum ETF Amid Intense Market Anticipation

July 2024 Crypto Watchlist: Emerging Blockchain Coins Poised for Growth

Pendle DeFi Protocol: A Case Study in Crypto Market Volatility

Ethereum Whale Faces Liquidation, ETH Price Nosedive

Don't miss our GOMINING token promo on the TON network!

Join our free newsletter for daily crypto updates!