Understanding the Nigerian Crypto-currency tax update.

[BIT-BENDER]

We might have heard, learnt or discussed the new Crypto-currency tax upgrade by the Nigerian government here you can actually understand so much about it by watching this https://youtu.be/jt0HteF5POs?si=IxRG8OjCH7elCtnX

This upgrade goes beyond your regular tax on profit, because this government are actually taxing Crypto-currency traders on things like converting your crypto to naira and for using your own naira to get Crypto-currency, also you will be taxed for using your crypto to make purchases to or for things like crypto swaps.
This tax are 1.5% stamp duty tax and 1% on withholding tax.

For me this tax is going to discourage people from actually using their Crypto-currency, we want a world where Bitcoin won't just be used as an investment opportunity but also something we can actually use regularly but when most actions with your Bitcoin are taxed then that can actually be very discouraging.

In the video and my other research I learnt that you won't be taxed moving your Bitcoin for example from one wallet to the other provided that the sending and receiving wallet are yours, is this like a punishment the government are implementing on actually using your Crypto-currency assets.

Let's not forget that there is already a tax on the Crypto-currency profit you declare to the government at the end of the year which for me is more reasonable.

[hmbdofficial]

Funny and interesting thing is that all this tax can only be done to the centralized exchanges user. this will only discourage people from using the Centralized exchanges, and will increase adopting the proper way to trade bitcoin without the use of any central authority. However I still think the tax is a bit friendly, if you are making money from crypto in Nigeria this tax of a thing shouldn’t border you to an extent.

[Frankolala]

Why will you be taxed from moving your funds from one noncustodial wallet to another when they don't know such thing is taking place. You are only to pay for your transaction fees. I don't use bitcoin to purchase anything at it stands. I'm only accumulating. If I want to trade, I convert to USDT. One thing with our government is that, they don't really take tax seriously due to corruption and that's a good advantage to us. I believe that it's the exchange that will tax you directly during your trade. As long as it's something small, we are good to go.

[BIT-BENDER]

Why will you be taxed from moving your funds from one noncustodial wallet to another when they don't know such thing is taking place. You are only to pay for your transaction fees. I don't use bitcoin to purchase anything at it stands. I'm only accumulating. If I want to trade, I convert to USDT. One thing with our government is that, they don't really take tax seriously due to corruption and that's a good advantage to us. I believe that it's the exchange that will tax you directly during your trade. As long as it's something small, we are good to go.

You will also be taxed for converting your Bitcoin to USDT as well so even if you don't want to use your Bitcoin to make direct purchase you will be taxed for converting your Bitcoin to USDT so actually you aren't going to escape it because you don't use Bitcoin directly.
Also I think the government will work hand in hand with exchange, like in the video I agree that the government will enforce exchanges into upholding these tax and make requirements for their users to be able to abide to the tax.

[adultcrypto]

This is becoming terrifying to be honest. I really do not understand how I will pay 3.5% when converting crypto to NGN and vice versa, pay the same thing when trading and also pay stamp duty when I receive NGN into my bank account. Our government should not do it in a way that people will prefer to evade the taxes because of it being too much beause that is exactly what is going to happen. People are not against paying taxes but when they become too high and unbearable and when people know that those taxes will be looted,  there will be no motivation to pay.

[ZeroVinsonN]

They are treating bitcoin and crypto in general as assets, it might not seem like a smart move to most people right now but it's actually a step in the right direction to integrate cryptocurrency into the country's economy, i will make out time later to actually watch the video and see what the whole thing is really about but any step towards giving cryptocurrencies the right recognition they deserve is a welcome development as long as it's not extreme.

[PostQuantumBTC]

I posted about it on this board when it was out

Crypto tax in Nigeria

Let's not forget that there is already a tax on the Crypto-currency profit you declare to the government at the end of the year which for me is more reasonable.

I think most people on this forum will evade this. I am not also expecting exchanges like Binance to try to corporate with the government because of what has happened.

With what we have seen for now, those well known exchanges like Bybit have not requested for Tax ID. They know Nigerians will move elsewhere like to Hyperliquid, Asterdesk, Lighter and other ones that do not require KYC at all for trading. About the p2p part, I do not know what will happen yet but I know what Nigerians can do.

[osasshem]

The whole matter about taxation is something becoming more serious.
This will affect those who uses centralised exchanges (of which I am one of those), but it is to hold on yet and see what happens by the end of the year, cause the end of the year already has some tax awaiting it. This will create room for those who are not traders to take full use of decentralised exchanges, and the use of centralised exchanges will depreciate.

[casey15]

I think the incident for double taxation is not of the things that we should really talk about. Imagine someone who earns in naira, and has already paid tax from the money he earns, then he decides to earn Bitcoin, if there is another tax attached to the purchase the cost starts to pile up even before he makes any profit.
Let's say Bitcoin appreciates and he made profit, by the time he is selling, there may be another tax attached to the profit. At this point, there will be tax at every point of transaction with the asset.
While I'm not really totally against the idea of taxing crypto profit, my concern is the fact that taxing ordinary transactions on top of profit taxation could make crypto unnecessarily expensive to use. This is very crucial to us Nigerians because we use crypto so save, invest and to store values not only trading. If the cost of using it keeps increasing, there will definitely be a black market for it. Good regulations should be balanced that way it makes it more acceptable and doesn't create more problems

[Sticky Bomb]

They are treating bitcoin and crypto in general as assets, it might not seem like a smart move to most people right now but it's actually a step in the right direction to integrate cryptocurrency into the country's economy, i will make out time later to actually watch the video and see what the whole thing is really about but any step towards giving cryptocurrencies the right recognition they deserve is a welcome development as long as it's not extreme.

Clear regulations is the right path for cryptocurrency to thrive, but with the writeups I've read, this is rather chocking. I was thinking that it is only right to tax your liquidations and not your conversion. For someone who only wanted to convert from one asset to another without selling for fiat, I don't think the person should be taxed since he/she has not liquidated the assets. Every taxation should wait for the person to declare their profits periodically. We can already see that these taxation is extreme and unbearable from the explanation.

Do they take these taxes they've put when you convert from one coin to another into account when they're about to tax your profits or is it just in a way to chock crypto users?

[Btcdeybodi]

You will also be taxed for converting your Bitcoin to USDT as well so even if you don't want to use your Bitcoin to make direct purchase you will be taxed for converting your Bitcoin to USDT so actually you aren't going to escape it because you don't use Bitcoin directly.
Also I think the government will work hand in hand with exchange, like in the video I agree that the government will enforce exchanges into upholding these tax and make requirements for their users to be able to abide to the tax.

There are still exchanges that you can send bitcoins from a self-custody wallet and convert to USDT without having to fill KYC documents. See let me tell you, if the government thinks that they can track all crypto transactions of Nigerians then they are lieing to themselves because a lot of people will find ways to bypass these taxes. For instance, I can have someone who is into cryptocurrency, I can send him bitcoins directly to his address without having to convert it to USDT then he will send Naira to me.

The only way to trace cryptocurrency transactions is through KYC, many Nigerians will begin to avoid those exchanges that requires KYC as soon as they want to register. The only time they will pay taxes is when they want to perform peer-to-peer transactions by converting crypto assets to Naira on exchanges. Not every exchanges will agree to work with the Nigerian government especially those that doesn't offer Naira p2p services.

[Rgram]

In the video and my other research I learnt that you won't be taxed moving your Bitcoin for example from one wallet to the other provided that the sending and receiving wallet are yours, is this like a punishment the government are implementing on actually using your Crypto-currency assets.

It’s not a punishment but, a measure that would revert to the original purpose for which Satoshi Nakamoto developed Bitcoin in the first place, moving from wallet to wallet while ensuring anonymity and a great deal of privacy for it’s users. So, I don’t see it as a punishment, it might look like it since Bitcoin haven’t gone mainstream yet, still it’s a phase that Bitcoin has got to pass through and pass through it will.

[Cryptomultiplier]

They are treating bitcoin and crypto in general as assets, it might not seem like a smart move to most people right now but it's actually a step in the right direction to integrate cryptocurrency into the country's economy, i will make out time later to actually watch the video and see what the whole thing is really about but any step towards giving cryptocurrencies the right recognition they deserve is a welcome development as long as it's not extreme.

This  new tax deduction system is going to tell more on those who sound or trade cryptocurrency rather than on those who actually just hold it and while it might be in a way a claim by the government in recognition of cryptocurrency and even benefitting from it, it might just be inconvenient as it stands because it's mostly automatic and since major adoption is on CEX, it makes it all the more like it's being controlled by the CBN still because am sure any policies like these would also be targeted at crypto currencies in the broader sense.

It's better to just hold your cryptocurrency in self custody than spend it because I believe Bitcoin is meant or created to function effectively as a medium of exchange that doesn't incur external cost besides miners fees we have to pay.

[Promocodeudo]

Do they take these taxes they've put when you convert from one coin to another into account when they're about to tax your profits or is it just in a way to chock crypto users?

Yes of courses, it is done to choke the crypto users, can't you see that, I have been reading some comments from different users here, some are giving the impression that they are okay with the new development, which is funny, when you are been taxed in converting to different crypto asset until it get to your receiving bank, what does that mean to us, this government would've told us that we should all die before they assume office, I do not think there's any where this government is friendly, I know what this will result to, Many exchanges that try to implement this might likely lose customers because people will definitely look for other alternatives, I have never seen a government like this, since my life,