KuCoin Africa Hits Nigerian Users With New 7.5% Tax After The Crypto Industry In Nigeria Recently Valued At $400 Million
Crypto in Africa is once again in the news. In this instance, users of the KuCoin exchange in Nigeria will not be pleased with the company’s latest announcement. Signs of an immediate regulatory shift for cryptocurrency in Nigeria emerged on Wednesday as crypto exchange
KuCoin Africa Adding Further Regulation To The Crypto Industry In Nigeria
An email from KuCoin Africa was sent to its users stating that from July 8, 2024, it would begin charging a 7.5% value-added (VAT) tax on all transaction fees for Nigerian users. In the same email, the exchange claimed a “regulatory update” as the reason for this new tax. On social media, many concerned Nigerians were initially worried that the 7.5% tax was for the full monetary value of each trade. KuCoin Africa posted on X regarding the tax whilst giving a clear example to show that the VAT is only applied to the transaction fees (typically between 0.05-0.1%).
✅KuCoin introduces 7.5% VAT on trading fees for Nigeria Users
We are writing to inform you of an important regulatory update that impacts our users from Nigeria.
Starting from July 8th, 2024, we will begin collecting a Value-Added Tax (“VAT”) at a rate of 7.5% on… pic.twitter.com/Y6elL3RjFi
— KuCoin Africa (@KuCoinAfrica) July 3, 2024
This is the second year running that crypto tax has been on the agenda within Nigeria.
Former Nigerian president Muhammadu Buhari, introduced widescale changes to the nation’s revenue drive via the 2023 Finance Act. It included a 10% capital gains tax on profits made in the disposal of digital assets, going into effect May 1, 2023. This news was initially met with outrage and confusion from Nigerians as they stated a lack of clarity over the crypto industry could make it challenging to collect the capital gains tax. Looking at social media shows that this new VAT tax from KuCoin is being met with similar sentiments.
Securities And Exchange Commission Calls Crypto In Nigeria A $400 Million Industry
Nigeria is the leading African country when it comes to crypto adoption by a wide margin. The introduction of yet another crypto-related tax will raise questions about the wider implications for the country’s expanding crypto industry. The SEC for Nigeria just last week estimated that the digital asset industry there is valued at over $400 million.
According to the new regulation, all operating and prospective VASPs (including crypto brokers/dealers) to visit the SEC ePortal to complete the application process no later than 30 days from the date of the circular.
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https://t.co/AJOpgeA2Qjvia @technextdotng
— David Afolayan (@aforisms_) July 4, 2024
In June, the Nigerian SEC requested crypto exchanges and crypto traders to re-register their businesses within a 30-day window. It stated that a failure to do so would result in enforcement actions. The SEC stated this move was part of a long-term plan to regulate the crypto sector within the African country.
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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