JAKARTA - KuCoin, recently announced the 7.5% implementation of transaction taxes for all trades made by users in Nigeria. The move comes about four months after the Nigerian government filed charges against Binance over tax evasion charges.
In its official announcement, KuCoin stated that it will start collecting a 7.5% value added tax (VAT) on transaction fees starting July 8. This policy aims to adapt to the latest regulatory developments in Nigeria. This update will have an impact on all users who have registered their Know Your Customer (KYC) information in Nigeria.
Reporting from Crypto Potato, KuCoin explains that this tax applies to transaction fees for each trade, not the number of transactions. For example, for transactions worth 1,000 Tether (USDT), users will be charged a fee of 1 USDT and a tax of 0.075 USDT, which is 7.5% of that cost. Thus, the net amount for the transaction is 998.925 USDT.
KuCoin's announcement comes after the Nigerian government filed charges against Binance on tax evasion charges about four months ago. In March, the Nigerian Federal Income Agency (FIRS) brought Binance to court on four counts, including tax evasion, money laundering, and terrorism financing.
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According to the FIRE lawsuit, Binance failed to cut VAT from Nigerian crypto traders on its platform, did not register and pay taxes arising from the services offered, assist and support users in ignoring their taxes, and did not issue VAT invoices to users to ensure appropriate tax payments.
With this latest update from KuCoin, speculation has emerged about the fate of crypto users in Nigeria going forward. KuCoin and Binance have stopped peer-to-peer services for Nigerian naira, and it is likely that other exchanges will follow the same steps in implementing taxes for all trades.
The tax application by KuCoin invites various reactions from the crypto community in Nigeria. Some users feel burdened with this additional cost, while others see it as a positive step in increasing transparency and compliance with regulations.
"This step is important to ensure that the crypto industry in Nigeria goes according to existing rules," said an economic analyst at Lagos. Despite the added costs, it will help create a more stable and reliable ecosystem.
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