Regulation
KuCoin to impose 7.5% VAT on Nigerian transactions as part of regulatory changes
Cryptocurrency Exchange KuCoin said it would start collecting a 7.5% value-added tax on transaction fees from its Nigerian users from July 8.
According to a July 3 statement, the company said:
“From 8th July 2024, we will begin levying Value Added Tax (“VAT”) at a rate of 7.5% on the transaction fee of each transaction for users whose KYC information is registered in Nigeria.”
The platform explained that the 7.5% fee would apply to the transaction fee of each transaction, not the transaction amount. It added that the fee covers all types of transactions that Nigerian users can make on its platform.
KuCoin attributed its new decision to “an important regulatory update.” However, other cryptocurrency trading platforms in the country, such as ByBit And Binancehave not yet revealed any such tax measures for their users as of press time. CryptoSlate has reached out to these companies for comment.
Local industry players said the VAT measure suggested an opening for cryptocurrency growth in the country. A user X wrote:
“The Nigerian government has changed its position and is willing to tax cryptocurrency exchanges, thereby generating revenue for the nation instead of opposing the technology. A welcome development, in my opinion.”
Nigeria has one of the highest exchange rates Cryptocurrency Adoption Rate in the world, ranking second on Chainalysis’ Global Cryptocurrency Adoption Index in 2023.
The move comes as the Nigerian government has adopted a somewhat hostile stance towards the emerging industry.
Earlier this year, the Nigerian government blamed the currency problems on manipulative activities by cryptocurrency exchanges. This prompted several exchanges, including KuCoin, to suspend all their peer-to-peer (P2P) activities involving the Nigerian Naira (NGN).
Since then, authorities have have increased their surveillance and skepticism towards digital assets. Notably, the Nigerian government launched legal action against Binance in March, slapping charges of tax evasion and money laundering against the global trading platform.