The Federal Government demonstrated its opposition to cryptocurrency in the country by ordering banks to close accounts of individuals or entities involved in any transaction sometime last year. Today, the FG unveiled the Finance Bill 2022, which aims to tax all sectors of the economy, including digital assets, cable undertakings, and lottery and gaming businesses.
The bill also contains an amendment under Chargeable Assets stating that “subject to any exceptions provided by this Act, all forms of property shall be assets for the purposes of this Act, whether situated in Nigeria or not, including Options, debts, digital assets and incorporeal property generally.”
According to a statement signed late Thursday by Laolu Akande, Senior Special Assistant to the Vice President on Media and Publicity, these were discussed at an extraordinary virtual meeting of the National Economic Council presided over by Vice President Yemi Osinbajo.
The statement is titled ‘At NEC meeting, FG, governors in consultation on proposed 2022 Finance Bill.’
It read in part, “The meeting which was presided over by Vice President Yemi Osinbajo, SAN, members of the Council were briefed on the main features of the bill by the Minister of Finance, Budget and National Planning, Zainab Ahmed.
“According to the Minister, the proposed Finance Bill 2022 is anchored on five fundamental policy drivers: Tax Equity; Climate Change; Job Creation / Economic Growth; Tax Incentives’ Reform; Revenue Generation / Tax Administration.
“She added that the bill seeks to amend relevant taxes, excises and duty statutes in line with the macroeconomic policy reforms of the Federal Government and to amend and make further provisions in specific laws in connection with the public financial management of the Federation.”
Other aspects of the Finance Bill include Chargeable Assets, Loss Exclusion, and Business Asset Replacement. For example, the Tax Equity pillar would bring all sectors of the economy into the tax net, including Capital Gains Tax on digital assets, Cable Undertakings, Lottery and Gaming Business.
Similarly, the bill’s Climate Change and Green Growth pillar would include incentives for the natural gas sector as well as penalties for gas flaring.
Under the Tax Incentives Reforms pillar, new deductions for R&D and Investment Tax Credits; Reconstruction Investment Allowance; Rural Investment Allowance; and Income in Convertible Currencies would be exempt, among other things.
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 the purposes of this Act, whether situated in Nigeria or not, including Options, debts, digital assets and incorporeal property generally.”
According to the bill, these provisions clarify the basis for taxing cryptocurrency and other digital assets, which is consistent with the government’s policy goal of improving cross-border and international taxation of growing e-commerce with emerging markets.
Nigeria will thus join the ranks of jurisdictions that currently tax digital assets, which include the United Kingdom, the United States of America, Australia, India, Kenya, and South Africa.
Ahmed also stated that extensive consultations on aspects of the bill, such as tax avoidance and evasion, had taken place, with the introduction of a general anti-avoidance route.