Nigeria targets crypto inclusion in upcoming tax system overhaul

The Nigerian government is set to incorporate cryptocurrencies into its tax system, marking a significant shift in how the country approaches the burgeoning digital asset market.

The Federal Inland Revenue Service (FIRS), Nigeria’s primary tax authority, plans to introduce a tax administration bill specifically targeting the cryptocurrency industry.

FIRS Chairman Zacch Adedeji announced the proposal during a meeting with a joint committee of the Nigerian National Assembly, highlighting the need to align the country’s tax laws with current economic realities.

Nigeria, despite being a major player in the global cryptocurrency market, currently receives minimal tax revenue from crypto-related activities.

The proposed tax law aims to change this by ensuring that the country benefits from the increasing use of cryptocurrencies for trading, cross-border payments, and other financial activities.

Adedeji emphasised that Nigeria cannot ignore the cryptocurrency ecosystem, which has become integral to modern finance.

He pointed out that while the Central Bank of Nigeria had previously noted that Binance, a leading cryptocurrency exchange, generated $26 billion from Nigerian transactions, the country has not been able to collect taxes from such activities due to a lack of regulatory framework.

The FIRS Chairman is optimistic that the new tax law will help the agency meet its ambitious revenue target of $12.2 billion (19.4 trillion naira) for the year.

He assured lawmakers that the proposed changes would make the tax system more efficient and responsive to the realities of the digital economy.

Senate Finance Committee Chairman Sani Musa praised Adedeji for his proactive approach and supported the idea of a streamlined tax collection process.

House Finance Committee Chairman Kalejaiye Paul also expressed his backing for the FIRS’s efforts, signaling broad legislative support for the initiative.

As Nigeria moves forward with these changes, the inclusion of cryptocurrencies in its tax system could set a precedent for other nations grappling with how to regulate and tax digital assets effectively.