Nigeria’s finance ministry is currently drafting a “Finance Bill 2022” that includes taxes on digital assets, cable undertakings, lottery, and gaming businesses.
This was disclosed during a virtual National Executive Council (NEC) meeting presided over by Vice President Yemi Osinbajo.
The minister of finance, Zainab Ahmed, briefed the council on the provisions of the bill. According to the minister, the bill is based on five key policy pillars: tax equity, climate change, economic growth, job creation, tax incentive reform, revenue generation, and tax administration.
The bill seeks to revise relevant tax legislation, as well as excise and duty laws, to align them with the Federal Government’s macroeconomic policy reforms.
This measure aims to incorporate all economic sectors into the tax system, particularly those that have grown considerably over time, such as the gaming and cryptocurrency industries.
In keeping with the government’s strategic goal of improving cross-border and international taxation and expanding e-commerce with emerging economies, the bill includes provisions that lay out the legal framework for taxing cryptocurrency and other digital assets.
The Central Bank of Nigeria (CBN) prohibits the use of cryptocurrency and other digital assets. However, Nigeria’s Securities and Exchange Commission classifies digital assets like cryptocurrencies as securities. Hence, they have legal standing and can be taxed appropriately.
By amending the finance bill, the government is attempting to tax Africa’s largest economy in the cryptocurrency market, which is worth billions of naira.
According to the government, taxing digital assets places Nigeria in the same category as countries such as the United Kingdom, the United States of America, Australia, India, Kenya, and South Africa that already impose similar taxes.
The NEC has decided to revise the draft after considering the governors’ feedback before presenting it to the president, who will then forward it to the national assembly for legislative approval.
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