The Nigerian government has decided to impose a 7.5% Value-Added Tax (VAT) on all cryptocurrency transactions.
This move follows a broader crackdown on cryptocurrency platforms that the government claims have been destabilizing the national currency, the naira.
KuCoin, a prominent cryptocurrency exchange, announced its compliance with this new directive.
The exchange, which had previously deactivated its peer-to-peer (P2P) functions and exited the Nigerian market, informed its users about the update on Wednesday.
Starting from July 8, 2024, KuCoin will implement the VAT charges on all accounts registered in Nigeria.
The tax will be applied to transaction fees for users whose Know Your Customer (KYC) information identifies them as Nigerian residents.
This regulatory update is part of the Nigerian government’s ongoing efforts to control the impact of cryptocurrency trading on its economy.
By imposing VAT on crypto transactions, the government aims to curb speculative activities that it believes are harming the naira.