Heads Up, Crypto Traders: 7.5% VAT on Transactions Starts July 8th in Nigeria

Mobel
By Mobel 3 Min Read

Heads Up, Crypto Traders: 7.5% VAT on Transactions Starts July 8th in Nigeria Cryptocurrency traders in Nigeria will start paying 7.5 percent value-added tax (VAT) with effect from July 8, 2024.

A  cryptocurrency platform, KuCoin, disclosed in an email that  it will commence collection of the VAT on transaction fees for users in Nigeria at the said date.

The company stated that a regulatory update in Nigeria led to KuCoin’s decision to introduce the VAT.

According to KuCoin, for every trade, the 7.5 percent VAT will be applied to the transaction fee, not the total transaction amount.

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It further stated: “We are writing to inform you of an important regulatory update that impacts our users from Nigeria.

“Starting from July 8, 2024, we will begin collecting a Value-Added Tax (VAT) at a rate of 7.5 percent  on transaction fees in each trade for users whose KYC information is registered in Nigeria.

“Note: The 7.5% is only charged on the 0.1%/0.05% transaction fee and not your total amount which will be remitted,”  the company added.

Giving more details, KuCoin said, if a user buys $1,000 worth of bitcoin with a 0.1 percent fee rate, the transaction fee would be $1.

The crypto platform added that the VAT would be 7.5 percent of the fee which is $0.075 – the net amount for the transaction would be $998.925.

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“Please note that the VAT will be applied to the transaction fees in each trade, not the transaction amount, and covers all transaction types on KuCoin platform,” the crypto exchange said.

See also  The exchange rate between the Naira and the USD remains steady at N1,300.

Recall that in 2022, Zainab Ahmed, then Minister of Finance, Budget and National Planning, had initially hinted at government’s plans  to tax cryptocurrencies and other digital assets.

Also in the 2023 Finance Act, the government imposed a  10 percent tax on profits from digital assets, including cryptocurrencies, but the particular provision of the act was not enforced.

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In May, the Securities and Exchange Commission (SEC) announced plans  to delist naira from all peer-to-peer (P2P) platforms.

SEC said the decision was taken to avoid the level of “manipulation” happening in the cryptocurrency space.

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