Kucoin to Begin 7.5% Tax Collection on Transaction Fees For Nigerian Users
Kucoin, one of the leading global cryptocurrency exchanges, has announced the introduction of a 7.5% value-added tax (VAT) on transaction fees for its customers in Nigeria. In an official statement, Kucoin revealed that the new development is in line with the new regulatory update in the country.
The exchange which previously suspended its peer-to-peer service in Nigeria is still looking to maintain its stronghold in the region given that Nigeria has one of the top cryptocurrency adoption rates in the world. Notably, the VAT will be applied to users who have completed their KYC verification in Nigeria.
Kucoin Applies 7.5% VAT on Transaction Fees
The Seychelles-based exchange giant informed Nigerian users in a statement earlier today that it will commence the tax collection from July 8. Kucoin emphasized that the tax will be applied to transaction fees in each completed trade and not the transaction amount. As an example, a customer who purchased 1,000 USDT worth of Bitcoin and pays 1 USDT (0.1%) transaction fee, will be subject to a 0.075 USDT (7.5% of the fee) tax.
Meanwhile, other crypto exchanges operating in the country including Binance and Bybit have yet to release statements acknowledging this regulatory update. The new tax move by the government suggests a new approach by the authorities to welcome crypto growth in the country rather than fight it.
Reacting to the situation, a user on X (formerly Twitter) stressed the possibility of crypto being a “legal tender” in Nigeria. He wrote, “So it’s safe to say crypto is now legal tender in Nigeria—what a ride!.” Furthermore, he pointed out that the new move by the government will help generate revenue for the nation which offers better opportunities than opposing it.
Recall that earlier this year, the Nigerian government cracked down on crypto exchanges, blaming them for manipulating foreign exchange on the naira. As a result, it called for a ban on peer-to-peer services. Following this, it arrested two Binance executives in the country on charges of tax evasion and money laundering while increasing scrutiny of digital assets.
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