Obinna Iwunna, the president of the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN), has expressed concerns about the implementation of the Finance Act, 2023, which was recently signed into law. The act introduces several tax reforms aimed at modernizing Nigeria’s fiscal framework, including a 10% tax on gains from the disposal of digital assets, including cryptocurrencies.
In an interview with Cointelegraph, Iwunna criticized the introduction of a 10% tax on cryptocurrencies in the current uncertain climate, describing it as premature. He pointed out the ongoing issue with the Central Bank of Nigeria (CBN) instructing commercial banks not to facilitate financial transactions involving cryptocurrencies. Given that commercial banks are still unable to process cryptocurrency transactions, he questioned the feasibility of taxing something that is not fully recognized or defined. He emphasized the need for clarity and the establishment of enabling infrastructure before imposing taxes.
Iwunna highlighted the importance of a collective understanding of cryptocurrency among relevant entities such as the Nigerian Securities and Exchange Commission (SEC), the CBN, and the National Information Technology Development Agency (NITDA), each responsible for different aspects of cryptocurrencies. Once a comprehensive and unified definition is established, policymakers can develop appropriate policies, regulations, and taxation measures.
Regarding engagement with the SEC and CBN, Iwunna confirmed that Nigerian crypto stakeholders have approached these entities with their concerns and are currently awaiting a response. While discussions have taken place, no definitive decisions have been made yet.
While acknowledging the government’s goal of broadening the tax base, Iwunna emphasized the need to ensure that taxation does not hinder the growth of the cryptocurrency industry. Clarity is sought regarding the implications of taxation and its connection to the recognition of cryptocurrency and associated procedures.
Iwunna also pointed out that the lack of consultation, as observed during the e-naira launch, could impede the adoption of the tax laws. Collaborating with the digital assets ecosystem could have resulted in the rapid adoption of the e-naira by millions of Nigerians had there been proper engagement and consultation.
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