Crypto exchange KuCoin said it would start collecting a 7.5% value-added tax on trading fees from its Nigerian users on July 8.
According to a July 3 statement, the firm said:
“Starting from July 8th, 2024, we will begin collecting a Value-Added Tax (“VAT”) at a rate of 7.5% on transaction fees in each trade for users whose KYC information is registered in Nigeria.”
The platform explained that the 7.5% fee would be applied to each trade’s transaction fees, not the transaction amount. It added that the fee covers all transaction types that Nigerian users can perform on its platform.
KuCoin attributed its new decision to “an important regulatory update.” However, other crypto trading platforms in the country, like ByBit and Binance, have yet to reveal such tax measures for their users as of press time. CryptoSlate has reached out to these firms for comment.
Local industry stakeholders said the VAT tax move suggests an opening for crypto growth in the country. One X user wrote:
“The Nigerian government has shifted its stance and is ready to tax crypto exchanges, generating revenue for the nation instead of opposing the technology. A welcome development, if you ask me.”
Nigeria has one of the highest crypto adoption rates in the world, ranking second on Chainalysis’ Global Crypto Adoption Index in 2023.
Still, the move comes as the Nigerian government has adopted a somewhat hostile stance toward the emerging industry.
Earlier in the year, the Nigerian government blamed manipulative activities on crypto exchanges for foreign exchange woes. This prompted several exchanges, including KuCoin, to suspend all their peer-to-peer (P2P) activities involving the Nigerian naira (NGN).
Since then, the authorities have increased their scrutiny and skepticism toward digital assets. Notably, the Nigerian government began legal actions against Binance in March, slapping tax evasion and money laundering charges against the global trading platform.
