FIRS moves to regulate crypto industry with planned legislation

Business a.m.

The Federal Inland Revenue Service (FIRS) plans to collaborate with the National Assembly in the enactment of a law to regulate the crypto industry. The FIRS, which is the government agency responsible for collecting taxes in Nigeria, indicated that this step will ensure the country’s crypto industry operates in accordance with established guidelines and regulations, thereby ensuring compliance with the country’s fiscal policies.

Zacch Adedeji, the executive chairman of the FIRS made the disclosure during a stakeholder engagement with the Senate and House Committee on Finance, organised by the intergovernmental relations department of the service with the theme, “Repositioning the FIRS to achieve its mandate.’’

“The plan first is to have the law that regulates it, and that is why you see that we are here with the legislature, which will be the base of charging. And that is done in any other place in the world when you have this innovation or system, so you just have to get ready for it because you can’t go away from it. So we just have to plan to regulate it in such a way that it is not injurious to the economic development of Nigeria,” he said.

During his opening speech at the weekend stakeholder engagement, Adedeji, informed the gathered lawmakers of the proposed bill to revamp the revenue administration in Nigeria. He also stressed the need for a law that would harmonise, re-code, and simplify tax laws, pointing out that even the Stamp Duty Act of 1939, predating the advent of the internet, had to be updated.

“Today, we cannot run away from cryptocurrency but as we stand today, there is no law anywhere in Nigeria that regulates cryptocurrency. We cannot run away from it,” he added.

Cryptocurrency platforms have recently been the focus of increased regulatory scrutiny, following the departure of Binance from the Nigerian market after allegations of manipulation of the naira-to-dollar exchange rate. In response to this, the government has taken a step towards regulating the crypto industry, announcing the imposition of a 7.5 percent Value-Added Tax (VAT) on crypto transaction fees.

In late 2023, the Central Bank of Nigeria (CBN) removed its prohibition on banks offering crypto-related services, signalling a pivot from the restrictive policies that had previously been in place.

This policy change, which was welcomed by many Nigerian crypto users, marked a shift towards a more permissive approach to cryptocurrency, indicating a willingness to regulate the crypto market rather than outrightly ban it. This development was seen by many as a positive step for the future of cryptocurrency in Nigeria, as it opened up new opportunities for crypto service providers and increased accessibility for local crypto users.