KuCoin, a cryptocurrency exchange, says it will commence collection of a 7.5 percent value-added tax (VAT) on transaction fees for users in Nigeria.
The company said a regulatory update in Nigeria led to
KuCoin’s decision to introduce the VAT.
In a statement on July 3, the cryptocurrency platform said
the deduction of the VAT would be effective from July 8.
KuCoin said for every trade, the 7.5 percent VAT will be
applied to the transaction fee — not the total transaction amount.
“We are writing to inform you of an important regulatory
update that impacts our users from Nigeria,” the company 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.
“Nb: The 7.5% is only charged on the 0.1%/0.05% transaction
fee and not your total amount which will be remitted.”
According to KuCoin, if a user buys $1,000 worth of bitcoin
with a 0.1 percent fee rate, the transaction fee would be $1.
The VAT, the crypto platform said, would be 7.5 percent of
the fee which is $0.075 — the net amount for the transaction would be $998.925.
“Please note that the VAT will be applied to the transaction
fees in each trade, not the transaction amount, and covers all transaction
types on KuCoin platform,” the crypto exchange said.
In 2022, Zainab Ahmed, former minister of finance, budget,
and national planning, had initially hinted at government’s plans to tax
cryptocurrencies and other digital assets.
In the 2023 Finance Act, the government imposed a 10 percent
tax on profits from digital assets, including cryptocurrencies.
However, the particular provision of the act was not
enforced.
In May, the Securities and Exchange Commission (SEC) announced
plans to delist naira from all peer-to-peer (P2P) platforms.
SEC said the decision was taken to avoid the level of
“manipulation” happening in the cryptocurrency space.
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