You know what's up right now, on the 6th of this month, the Nigerian government rolled out a new tax regime which people are not happy about. Up to 20% income tax on individual annually. The tax system has been the talk everywhere both online and offline. Everywhere I go, people talking about it while sharing their displeasure about the tax system. People are calculating and complaining while trying to make sense of how the new tax policy would affect their income.
This looks like the last straw that could break the back of the Carmel for many Nigerians. Already, everyone knows about the high cost of living in Nigeria. Prices of food substances are going higher everyday, transportation is becoming too expensive, water and electricity are nothing to write about, and workers salaries remain stagnant while the cost of living keep going up. This is why some people are looking for alternative to protect their hard earned income against the new tax regime.
A lot of people are already seeing crypto as the only alternative to escape from this tax regine or at least reduced its brow on their income. Comments like "this is why crypto was created" or they can't tax what they can't fully control" are flying around on social media, giving a lot of people confidence in crypto. For some people in Nigeria, crypto is like a safe haven where no one can see how much they have, and cannot be taxed directly.
While this discussion was going on and gaining momentum, it seems that the government was seeing what people were talking about on social media, and now they came up with another announcement, this time targeting crypto. The Nigerian government announced a new tax law that would link crypto transactions with personal identities using tax identification number TIN and National identity number NIN of crypto users. The joy that crypto could be an escape route from the new tax regime seems to be dispelled with the announcement. People were already becoming anxious to learn how to use crypto before this announcement came in.
This is where the confusion sets in for many ordinary crypto users. On one hand it seems like the government want to regulate both the entry and exit of crypto transactions to track and tax them. On the other hand, the Blockchain may be secured as it is, but the exchange platforms where users buy and sell crypto are being brought under government scrutiny and regulation, making it harder to maintain anonymity.
For ordinary Nigerians, there's a dilemma in this situation. Should crypto continue to be viewed as a medium of safety for their finances, or is it on the way to becoming just another controlled financial instrument like the banking system they are trying to escape from?
However, some people think that the crypto tax law is not a bad thing after all. They think that it could legalize crypto, reduce scam activities, and make it more attractive for genuine investors to invest in crypto. Others think this is just the beginning of more strict regulations that could lead to more heavier taxes on crypto in the future.
Many Nigerians turned to crypto because of necessity not because they are greedy. Some who are freelancers has no other means to receive money from international clients except crypto. Others rely on it to either send remittance abroad or preserve their income from inflation and currency devaluation. Young boys and girls who could not get a normal job are trying to create something for themselves through crypto.
It's therefore so disappointing to see crypto being taxed along with traditional income sources. This development make one ask the question about financial freedom, personal choice, and how much control the government could have over the people's income.
Nonetheless, history has proved that whatever the condition people learn how to adapt and find new way to survive. Some people will easily comply with the new tax regime, while others will seek alternative ways to navigate through the new regulations either through decentralized platforms or other means that are harder to track.
It's clear that Nigeria is on the brink of a new economic chapter where the people are forced to think about how they make and save money in a system where the government is tightening its grip on financial transactions and people's income sources. Whether this tax law affect crypto users or not, crypto nonetheless will continue to remain a major source of income for many especially the youths.
Overall, it's not a case of people looking for a way to escape being taxed but rather a matter of survival in a system that has failed in many ways.
