By Cyril Ogar, Abuja
The prevailing wind of digital currencies blowing across the world will no doubt leave an indelible mark in Nigeria as the Executive Chairman, Federal Inland Revenue Service, FIRS, Dr Zacch Adedeji, embarks on innovative cryptocurrency tax reforms.
Adedeji’s reforms are in no small way the much needed impetus for moving the country towards embracing the digital economy.
In this vein, pundits say his leadership ensures Nigeria’s tax policies adapt to the evolving financial landscape, aligning with global standards.
It would be recalled that the FIRS recently announced a comprehensive overhaul of the country’s tax policies, focusing specifically on the regulation of the rapidly growing cryptocurrency market with a view to modernizing it.
Interestingly, since the announcement, there has been no shortage of commendations and acceptance within and outside the shores of Nigeria.
For instance, Nigerian Professionals in Diaspora, Adedeji for his innovative crypto tax reforms, describing them as a game changer for the nation’s economy, noting that the crypto tax reforms are a bold step towards embracing digital economy”.
The statement read. “His leadership ensures Nigeria’s tax policies adapt to the evolving financial landscape, aligning with global standards”.
In a statement delivered at press conference in Abuja by Dr. Obiora Okereke, President, and Chief Mrs. Bukola Shonekan, Home Secretary, the group, the professional body noted that Adedeji’s efforts to modernize Nigeria’s tax system and effectively incorporate cryptocurrencies.
The statement added that the approach will boost confidence in the cryptocurrency market, protect consumers, and attract international investment.
“Adedeji’s commitment to modernizing Nigeria’s tax system is a game changer for the country’s economic growth”, the statement added.
“With Nigeria’s growing engagement in digital currency trading, the group recognized the need for a regulatory framework that effectively manages the evolving financial world.
“His crypto tax reforms are in the right direction”, the statement concluded. “We commend his vision and leadership in positioning Nigeria for economic success in the digital age”, it read.
Therefore, the Nigeria Professionals in Diaspora group urged stakeholders to support Dr. Adedeji’s initiatives, saying, “This move will create a more transparent, secure, and thriving financial system for Nigeria”.
The group is of the view that the current regulations, such as the Stamp Duty Act of 1939, are outdated and inadequate for addressing the complexities of digital currencies.
They applauded the plans to establish clear guidelines for digital assets, simplify tax reporting, and leverage technology to ease compliance.
Besides, Technical Assistant, Broadcast Media at the Federal Inland Revenue Service, Arabinrin Aderonke, cryptocurrency has become a major financial phenomenon in Nigeria. With substantial trading volumes and a growing base of users, digital assets like Bitcoin and Ethereum are not just a trend but a growing sector of the economy. This rapid growth presents both opportunities and challenges, highlighting the need for a regulatory framework that can effectively manage the evolving financial world.
According to her, “Countries around the world are working to figure out how to regulate and tax cryptocurrencies. In the United States, cryptocurrencies are treated as property, and any profits from them are subject to capital gains tax. The United Kingdom and Germany also classify digital currencies as assets and impose capital gains tax on them. Japan has a more detailed approach, taxing cryptocurrency gains based on whether they are considered miscellaneous income or capital gains. These global practices provide useful examples of how different regions are addressing the challenges posed by digital assets”.
Dr. Zacch’s changes to Nigeria’s tax system, especially regarding this new update on cryptocurrency, bring with it benefits for Nigerians. By setting clear rules for digital assets, these reforms make it easier for people and businesses to understand and meet their tax responsibilities. This clarity helps boost confidence in the cryptocurrency market and encourages more people to get involved, she noted.
She pointed out that the new rules also protect consumers by reducing the risk of fraud and scams, making the market safer. Additionally, better regulation means more tax revenue for the government, which can be used to improve public services and infrastructure. By tackling issues like tax evasion and illegal activities, the changes help create a more stable financial environment. Aligning Nigeria’s tax policies with global standards also helps attract international business and investment. Suffice it to say that this move is set to create a more transparent, secure, and thriving financial system for Nigeria.
Interestingly, as the digital economy evolves, keeping tax regulations up to date with technological advancements is important. Dr. Zacch, in his efforts, is taking charge to modernize Nigeria’s tax system to effectively incorporate cryptocurrencies. His approach involves establishing clear, practical guidelines for digital assets, simplifying tax reporting, and leveraging technology to ease compliance, says the technical assistant.
