– 7.5% VAT will be charged on the fees paid when trading on the Kucoin platform (from July 8th,2024).
Now, this change is only in the transaction fees and does not in any way apply to the total amount of transactions. However, this charge will apply to all types of transaction on the KuCoin platform.
KuCoin Updates it’s Nigerian Users on the 7.5% VAT on Trading Fees
Dear KuCoin User,
We are writing to inform you of an important regulatory update that impacts our users from the Republic of Nigeria. Starting from July 8th, 2024, we will begin collecting a Value-Added Tax (“VAT”) at a rate of 7.5% on transaction fees in each trade for users whose KYC information is registered in Nigeria.
Example Calculation:
Transaction: Buy 1,000 USDT worth of BTC
Fee: 1 USDT (0.1% fee rate)
Tax: 0.075 USDT (7.5% of the fee)
Net Amount for Transaction:998.925 USDTPlease note that the VAT will be applied to the transaction fees in each trade, not the transaction amount, and covers all transaction types on KuCoin platform.
If you have any questions or need further assistance, please join our Telegram Group, or contact our Online Support Team. We are here to provide you with more assistance and guidance. Thank you for your cooperation and understanding.
Best regards,
The KuCoin Team
— KuCoin Africa (@KuCoinAfrica) July 3, 2024
Regulatory Questions
The Nigerian crypto community has also found the news of concern as KuCoin is one website that was previously blocked by the Nigeria government.
Lucky Uwakwe, President of the Blockchain Industry Coordinating Committee Nigeria (BICCoN), has also raised an alarm over the implementation of this VAT charge on transaction. Notably, Lucky questioned the approach that the Nigeria authorities will adopt to ensuring that the numbers reported by KuCoin are not falsified. He also aired his reservations for the reportage and the dutiful remittance of the received VAT.
There are issues that illustrate the complexities and possible operational problems with this new tax levy. One of these issues is how the authorities would verify user numbers alongside trade reports without giving away the anonymity that made the users opt for crypto in the first place.
What This Means for Nigerian Crypto Users
This policy will bring about another financial burden on the trading activity of Nigerian users. From the standpoint of transaction cost efficiency, users may want to boycott KuCoin.
Additionally, on a practical level, the continued ban by Central Bank of Nigeria (CBN) against converting crypto to fiat worsens how VAT payment can be made. Nigeria IRS may Include All Crypto Transactions in Its Proposed Graduated Stamp Duty Tax Form.
With all the regulatory uncertainties that follow this kind of announcement coupled with the intermittent ban from the government, some local analysts expect that the VAT implementation in Nigeria could be a precursor to more stringent crypto regulations.
Another crypto analyst, Rume Ophi, argues that the move could be a sign of growing acknowledgment by authorities that Cryptocurrencies are legal tenders.
This outlook brings a cautiously optimistic future for cryptocurrency regulation in Nigeria.
