KuCoin to Impose 7.5% Tax on Crypto Transactions in Nigeria Starting Next Week

KuCoin Imposes 7.5% Tax Crypto Transactions in Nigeria: One of Nigeria’s popular crypto exchanges, KuCoin, has announced that it will begin collecting a 7.5% Value-Added Tax (VAT) on transaction fees from its users in the country starting next Monday, July 8, 2024.

The new tax regime will apply to users whose KYC information is registered in Nigeria.

According to an email sent to customers, the 7.5% VAT will be deducted from the transaction fees of crypto trades and will cover all transaction types on the KuCoin platform.

For example, if a trader buys 1,000 USDT worth of Bitcoin with a 1 USDT fee, the VAT will be 0.075 USDT (7.5% of the fee), and the net amount for the transaction will be 998.925 USDT.

This move comes after Nigeria signaled its intention to tax crypto in the revised Finance Act of 2022, which included a 10% tax on profits from digital assets.

However, it remains unclear if this directive is from the Federal Inland Revenue Service (FIRS) or regulatory authorities like the Securities and Exchange Commission (SEC).

KuCoin Imposes 7.5% Tax Crypto Transactions in Nigeria: Crypto Regulation in Nigeria

Nigerian authorities have adopted a mixed and somewhat contradictory approach to crypto regulation.

Since the beginning of 2024, they have been clamping down on crypto exchanges and peer-to-peer trading platforms, accusing them of manipulating the naira-to-dollar exchange rate.

KuCoin, the exchange making this announcement, is among those under scrutiny by the Nigerian government.

In May 2024, the platform had to shut down its peer-to-peer platform due to regulatory pressure.

The authorities have also been in a legal battle with the largest crypto exchange, Binance, which led to the detainment of two of its executives.

Global Crypto Taxation

Several countries, including the United States, United Kingdom, Australia, Canada, and European nations, have implemented various forms of crypto taxation, such as Capital Gains Tax, Income Tax, and Wealth Tax.

However, the Nigerian authorities will need to clarify their stance, as an item that is banned cannot be taxed.

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