KuCoin, a major global cryptocurrency exchange, announced it will start charging a 7.5% VAT on transaction fees for all users in Nigeria, beginning July 8, 2024. This update was shared on KuCoin’s X account on Wednesday.
The VAT will apply only to transaction fees, not the total transaction amount. For example, if you buy $1000 worth of crypto with a 0.1% fee rate, the transaction fee would be $1. The VAT on this fee would be $0.075, making the net amount $998.925.
Since the beginning of the year, Nigeria has had a mixed approach to cryptocurrency regulation. Authorities have cracked down on exchanges and peer-to-peer (P2P) transactions, targeting platforms like Binance for alleged Naira manipulation, while also hinting at potential regulation. This has left many Nigerians uncertain if the government plans to ban or regulate crypto.
Questions remain about whether the VAT applies only to P2P trades involving Naira or to all crypto transactions on KuCoin. It’s also unclear if the Nigerian government or an agency like the Federal Inland Revenue Service (FIRS) will authorise this tax, and if KuCoin can remit the VAT given the Central Bank of Nigeria’s restrictions on converting crypto to Naira.
KuCoin is not the only exchange facing scrutiny in Nigeria. In May, KuCoin shut down its P2P platform due to regulatory pressure. Meanwhile, Nigerian authorities have been in a prolonged legal battle with Binance, resulting in the detention of two Binance executives.
This new VAT announcement adds to the confusion. Nigerian regulatory authorities need to clarify how they can tax crypto, which is technically banned. As the July 8 deadline approaches, users are looking to KuCoin and Nigerian authorities for clear guidance to avoid further confusion and potential market disruptions.
Related Posts
Klasha Raises An Additional $2 Million To Expand B2B Cross-Border Payment Rails Into China
Moove Expands To Mexico, Extending Global Footprint
