The Minister of Finance, Budget, and National Planning, Zainab Ahmed, has said that a provision to tax bitcoin and other digital assets will be included in the 2022 finance bill.
At an extraordinary virtual meeting on Thursday, Ahmed updated the National Economic Council (NEC) on the key features of the law, according to a statement released by Laolu Akande, the spokeswoman for Vice President Yemi Osinbajo.
The minister has stated that five primary policy drivers form the basis of the proposed bill.
She named tax equity, climate change, job creation/economic growth, reform of tax incentives, and revenue generation/tax administration as the primary motivators.
She explained that the bill attempted to bring federal tax, excise, and duty laws in line with national reforms to macroeconomic policy.
Ahmed claims that the legislation’s secondary objective is to revise and supplement existing sections of law relating to the administration of the federation’s public finances.
She went on to list chargeable assets, excluding losses and replacing company property as other parts of the finance bill.
According to the release, Ahmed said, “For instance, under the Tax Equity pillar, all sectors of the economy would be brought under the tax net, including Capital Gains Tax on digital assets, cable undertakings, lottery and gaming business.”
“Similarly, under the bill’s Climate Change and Green Growth pillar, there would be incentives for the natural gas sector and discouragement of gas flaring.
“Under the pillar of Tax Incentives’ Reforms, there would be new deductions for Research and Development, and Investment Tax Credits; Reconstruction Investment Allowance; Rural Investment Allowance; Incomes in Convertible Currencies to be exempt, among others.
“Also, the bill contains an amendment under Chargeable Assets stating that “subject to any exceptions provided by this Act”, all forms of property shall be assets for this Act, whether situated in Nigeria or not, including options, debts, digital assets and incorporeal property generally.”
To better facilitate cross-border and international taxes of expanding e-commerce with emerging markets, the minister said the proposed measure defined the taxation of bitcoin and other digital assets.
She claimed that if Nigeria imposed taxes on digital assets, it would join the ranks of countries like the United Kingdom, the United States, Australia, India, Kenya, and South Africa.
The governors of Sokoto, Borno, Kaduna, Kebbi, and Ogun, among others, gave their thoughts on the bill after Ahmed presented it.
In light of their feedback, the NEC has decided to revise the draught finance law in preparation for its submission to the FEC, the last stop before the president sends the measure to the national assembly.
The CBN, Nigeria’s central bank, issued a directive to financial institutions in 2021, ordering them to terminate customers’ accounts engaged in cryptocurrency transactions.
The central bank also warned people to avoid cryptocurrency, saying it was being used to launder money and finance terrorism.