An example was given for clarity's sake. I'll give you a few others

- Say you bought $300 $BTC. The fee will be $0.3 and the VAT will be $0.0225

- If you bought $100,000 $SOL. You'd spend $100 in fees and $7.5 on VAT.

I have several issues and concerns regarding this development and I think you also need to be concerned.

How will the Nigerian government verify the trades, fees and VAT collected and remitted to be true and transparent? Would that not mean KuCoin giving up such information about its customers to the Nigerian government? Essentially, this move allows the Nigerian government to monitor its citizens' accounts on KuCoin. I know that KYC is important for complying with AML regulations, but this is the government doing too much.

Another issue I want to air is the fact that VAT is a tax on CONSUMABLE GOODS. Has everyone conveniently forgotten about this or is the meaning of Value Added Tax not known to the masses? I'll give you the definition of VAT by Investopedia:

"The term value-added tax (VAT) refers to a consumption tax on goods and services levied at each stage of the supply chain where value is added. As such, a VAT is added from the initial production of goods and services to the point of sale. The amount of VAT the user pays is based on the cost of the product minus any costs of materials that were taxed at a previous stage." culled from Investopedia

VAT is a consumption tax, added only to goods and services that we CONSUME. How are cryptocurrencies now consumables? When did that happen? Cryptocurrencies are classed as financial instruments and securities. There is no financial regulator nor broker on earth that added a VAT to financial instruments, it's an absurd proposition. The US was close to doing something similar when it was proposed that unrealised crypto gains from open trades should be taxed. How do you tax open positions? If I had a $100 USDT long position open and was currently in profit of $700 USDT, I'd be taxed on the $700 even though the trade may reverse and close in a loss. As you may guess, there was heavy lobbying pressure for that bill to be scrapped and it was, thankfully, the American lawmakers had sense.

Back to Nigeria, I'm not sure they do, and I say this out of deep concern. This is the first time I've ever seen VAT added to anything that involves financial trading. It hasn't been done to stock trading nor has it been done to forex so why crypto?

I can only surmise that this is a move by the federal government to increase its stranglehold on the crypto industry in Nigeria. For a government that doesn't see crypto favourably and does everything it can to stifle growth in the space, it is hypocritical and pathetic of it to tax that very industry. Making money off a thing you hate and try to end is not the best look, it sends mixed signals out to the international community. Does the government know what it wants?

The last issue I'll point out is the fact that the government wants to tax something that is partially illegal in the country. With this move, KuCoin may soon restart its P2P operations. Remember, this VAT affects ALL TRADES MADE, be it spot, futures or P2P. So the government won't legalise crypto trading and allow banks to process crypto transactions, but they are eager to take profit from all "illegal" trades made. At this point, nothing drops my jaw to the floor when it comes to regulations in Nigeria.

There are mixed reactions to this development as Nigerians look at it from different perspectives.

The president of the Blockchain Industry Coordinating Committee of Nigeria (BICCoN) expressed his concerns in a thread he posted to his X profile. Some of the points he raised are:

"1) Who gave KuCoin the permission to tax Nigerian users, is it an approval from Nigerian govt?

2) how does Nigerian government know that every Nigerian user as stated by KuCoin is true to the exact number for example if Nigerian are 10,000 users on KuCoin exchange and KuCoin says it only 5000 users how does the government know the truth?"

The bottom line is that the federal government is as confused and as confusing as ever. Authorities need to TRUTHFULLY clarify this situation and make necessary adjustments to policies that make this development illegal. Possibly, we may see bans on crypto removed, but that's just me being hopeful.

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