Cryptocurrency Taxation in Nigeria: Legal Frameworks and Regulatory Challenges
Keywords:
Cryptocurrency, taxation, Blockchain, regulatory challenges, smart contracts, decentralized financeAbstract
The growing acceptance of Cryptocurrencies has reshaped the world's financial landscape into a wider avenue for economic innovation and financial inclusion. However, this growth raises several serious regulatory challenges, especially on the road to taxation. This paper explores the complex intersection of Cryptocurrency and taxation with a specific focus on Nigeria. It explores the challenges that governments face in levying duties on digital assets arising from the lack of uniform tax frameworks, challenges in tracing pseudonymous transactions, and valuation issues due to market volatility. The paper reviews current legal frameworks in key jurisdictions, including the United States, the European Union, and Nigeria, showing different ways of classification and approaches in taxation. These include the adoption of Blockchain analysis tools, smart contracts to automate tax compliance, and international cooperation in standardizing tax rules across borders. The paper concludes by emphasizing the need for clear regulatory regimes that are enforceable, while maintaining a balance between innovation and fiscal responsibility. It calls for proactive measures and technological integration as a way of ensuring efficiency in taxation and compliance, especially in developing economies like Nigeria.
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