Chris Maurice, the founder and CEO of Yellow Card, believes that the proposed tax on cryptocurrency will not stop Nigerians from trading in digital assets. Despite being at the forefront of crypto adoption on the African continent, there remains a state of confusion surrounding the legality of cryptocurrency in Nigeria.
Towards the end of 2022, Nigeria’s Finance Minister announced that the West African country’s 2022 finance bill has provisions allowing the government to collect tax on cryptocurrency and other digital currency transactions.
This latest move by the Nigerian authorities has generated mixed reactions among stakeholders and crypto enthusiasts because the February 2021 CBN ban on crypto has not been lifted. In a chat with Technext, Chris Maurice, founder and CEO of Yellow Card, a crypto exchange committed to simplifying cross-border transactions on the African continent, sheds some light on the proposed taxation implications and how best to go about it.
Chris Maurice says although the Central Bank of Nigeria (CBN) has been clashing against crypto for a long time, the latest moves by the Nigerian Securities and Exchange Commission (SEC) show that the realisation that crypto is not going anywhere is looming.
“At this point I think it’s about the SEC and CBN working together to figure this out. It’s the regulation that makes crypto safer and allows us to be able to operate. With what we’ve seen, the SEC is doing a great job. Promoting innovation is a big part of technology and SEC recognized, I hope CBN follows suit.”Chris Maurice
Crypto taxation in Nigeria
Taxing cryptocurrency in a country like Nigeria is quite knotty. While few consider this a positive development, the general sentiment is that it is out of place.
“When you talk about taxing crypto, it’s a broader topic than people make it out to be. Crypto is currency, it has currency in the name the same way with dollar and naira, so you would make a fool of yourself to say should we tax the naira? What does that even mean, it doesn’t even make sense. We have people that are calling on taxes on crypto but what does that actually mean. Because if crypto is a taxable asset, then why is the CBN involved in regulating it? If it’s a currency, you can’t tax it. You can’t have your cake and eat it.”
Chris Maurice, however, says taxation in the industry can’t be avoided because crypto companies like Yellow Card are already paying them.
“There’s already taxes on income. If I’m a crypto trader and I make a million naira a month trading, technically I should be paying taxes on that million naira because that’s my income. The question is are people paying that. From experience in other parts of the world, the more you increase the tax, the more people look for ways not to pay the tax. Retail traders should be already paying the tax and if they’re not, the increase is not going to make them pay.” – Chris Maurice says.
Chris Maurice on the future of crypto in Nigeria
Regardless of the stringent measures being put in place by the Nigerian authorities, Chris Maurice says nothing can stop Nigerians from trading cryptocurrencies. He opines that the proposed taxation will not solve any problems. If the government wants to tax the burgeoning blockchain industry, they should encourage crypto companies to set up in the country.
“Again Nigeria is one of the largest countries in the world for crypto, so if the government was friendly towards crypto, more companies like Yellow Card would set up in Nigeria and pay taxes. So the first step is to allow crypto companies to operate. That’s how you grow an economy, you grow an economy by supporting innovation.”
Botswana, a southern African country, recently issued Yellow Card a virtual asset license to operate in the country.
“That’s an example of a regulator that actually wants to encourage innovation in the country. They want citizens to be trading crypto on a licensed exchange in Botswana. It’s been proven that you cannot stop Nigerians from anything Nigerians wanna do. All these things wouldn’t stop people from trading, it will only drive them to exchanges like FTX. Unregulated exchanges where their money could blow up.” – Chris Maurice.
Hopefully, the Nigerian authorities will embrace innovation in the new year and implement a framework to make Nigeria a crypto hub.
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