Key Points
- Nigeria’s Securities and Exchange Commission (SEC) plans to issue its first licenses for digital service providers and tokenized assets, responding to the surge in cryptocurrency adoption in the country.
- The Federal Inland Revenue Service (FIRS) is preparing to introduce a comprehensive bill to regulate cryptocurrencies and modernize Nigeria’s tax system, aiming to simplify laws and harmonize revenue collection.
SEC to License Virtual Asset Providers
Nigeria’s Securities and Exchange Commission (SEC) is taking a significant step towards regulating the country’s growing cryptocurrency sector. According to a report by Bloomberg, the SEC plans to issue its first licenses for digital service providers and tokenized assets.
SEC Director-General Emomotimi Agama, in an interview with Bloomberg, expressed enthusiasm about the potential of the crypto market in Nigeria. “Being a crypto enthusiast and fintech enthusiast, I can tell you without doubt that this is going to happen sooner than you think,” Agama stated. He emphasized the need to support the country’s youth in benefiting from the growing fintech sector, noting, “The market size is huge, and it is growing.”
This move by the SEC is a response to Nigeria’s surging adoption of cryptocurrencies and other digital assets. By licensing virtual asset providers, the regulator aims to capitalize on the opportunities presented by this growing market while protecting investors.
FIRS Proposes Comprehensive Cryptocurrency Bill
In a parallel development, the Federal Inland Revenue Service (FIRS) is preparing to introduce a comprehensive bill to regulate cryptocurrencies and modernize Nigeria’s tax system. FIRS Executive Chairman, Dr. Zacch Adedeji, announced these plans during a recent stakeholder engagement session with the National Assembly’s Finance Committees.
The proposed legislation is part of a broader effort to overhaul Nigeria’s tax system. Adedeji emphasized the importance of regulating cryptocurrencies: “We cannot run away from the cryptocurrency ecosystem because it is the in-thing. But as it stands in Nigeria today, no law regulates cryptocurrency operations.”
Modernizing Nigeria’s Tax System
The FIRS’s new bill will focus on cryptocurrencies and aim to simplify and modernize existing tax laws. Adedeji highlighted the Stamp Duty Act as an example of an outdated law that requires urgent attention. The proposed tax system overhaul comes as the Nigerian government increasingly recognizes the importance of digital assets and the need for updated legal frameworks to keep pace with technological advancements.
The FIRS chairman called for collaboration between the agency and lawmakers to draft and implement the proposed bill. He expressed confidence in the agency’s ability to achieve its revenue target, stating that current figures indicate the agency is on track.
Legislative Support and Future Outlook
The initiative has garnered support from key legislative bodies. Senate Committee on Finance Chairman, Senator Sani Musa, commended FIRS for organizing the stakeholders’ meeting and emphasized the need for a single tax collection agency to improve efficiency. He expressed the committee’s willingness to support FIRS in achieving its revenue target.
Similarly, the House of Representatives Committee on Finance, represented by Hon. Kalejaiye Paul, praised FIRS for its leadership and pledged the House’s support in collaborating with the agency to drive national development.
As Nigeria moves forward with these plans, the proposed legislation and licensing framework are expected to play a crucial role in shaping the country’s digital economy landscape and modernizing its tax administration system to meet the challenges of the 21st century.
It’s worth noting that Token Times AI had previously reported on plans for crypto regulation and tax system overhaul in Nigeria, indicating that these developments have been in the pipeline for some time.
