The Securities and Exchange Commission (SEC) is revising its regulations to ensure that all eligible transactions on regulated exchanges are captured within the formal tax framework. In an effort to expand the tax base, the SEC aims to include cryptocurrency trading and digital transactions in its revenue-generation plans.
In a statement on Tuesday, the commission confirmed that it seeks to tap into the growing digital economy by taxing cryptocurrency trades. While the SEC did not specify the exact revenue it expects to generate, it acknowledged that the inclusion of cryptocurrency transactions would make a significant contribution to tax revenues.
As part of its regulatory overhaul, the SEC is broadening its crypto licensing framework, which will involve issuing permits that enable residents to trade on centralized exchanges. These exchanges will allow for better monitoring and taxation of transactions.
“We expect gradual movement toward centralized exchanges, as they offer stronger protections and greater confidence for investors,” the SEC said in its statement.
This development follows a shift in Nigeria’s stance on cryptocurrency. In December 2023, the Central Bank of Nigeria (CBN) released operational guidelines for Virtual Assets Service Providers (VASPs) to banks and other financial institutions, signaling a departure from its previous stance of restricting cryptocurrency transactions.
Notably, in February 2021, CBN had instructed banks and non-bank financial institutions to close accounts of individuals or entities involved in cryptocurrency transactions. However, the regulatory landscape has evolved, with cryptocurrency gaining more acceptance.
In December 2022, former Finance Minister Zainab Ahmed highlighted provisions in the 2022 finance bill aimed at taxing cryptocurrency and other digital assets.
Additionally, the SEC announced on September 12, 2024, that 50 cryptocurrency exchanges had applied for operational licenses in Nigeria, reflecting the growing interest in formalizing the market.
