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kuCoin introduces 7.5% VAT on crypto transactions fees for nigerian users

kuCoin introduces 7.5% VAT on crypto transactions fees for nigerian users

In a recent regulatory update, KuCoin, a popular cryptocurrency exchange, has announced that it will begin collecting a 7.5% value-added tax (VAT) on transaction fees for users in Nigeria. The new policy will take effect from July 8, 2024, and will apply to every trade, with the VAT charged on the transaction fee, not the total transaction amount.

According to the company, the 7.5% VAT will be deducted from the transaction fee, which is typically a percentage of the total transaction amount. For instance, if a user buys $1,000 worth of bitcoin with a 0.1% fee rate, the transaction fee would be $1, and the VAT would be 7.5% of that amount, which is $0.075.

The Nigerian government has been working to regulate the cryptocurrency space, with the Finance Act of 2023 imposing a 10% tax on profits from digital assets. Although this provision was not enforced, it has led to a surge in regulatory efforts to tax cryptocurrencies and other digital assets.

KuCoin’s decision to introduce the VAT comes as part of its efforts to comply with regulatory requirements in Nigeria. The company emphasized that the VAT will be applied to all transaction types on its platform and will be remitted accordingly.

The move is seen as a significant development in the country’s efforts to regulate the cryptocurrency space, which has been plagued by concerns over manipulation and lack of transparency. The Securities and Exchange Commission (SEC) has publicly announced their plans to delist naira from all peer-to-peer (P2P) platforms to prevent manipulation.

KuCoin’s introduction of the VAT is likely to have a significant impact on Nigerian users who rely on cryptocurrency transactions. The company has promised to keep its users informed about any changes in regulatory requirements and has encouraged them to review their accounts to ensure compliance with new regulations.

This Article is Fact-Checked. See Policy.

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