Crypto in Africa: Nigeria taps blockchain to stop corruption, South Africa mulls pro-crypto tax guidelines
African countries are not just taking blockchain technology by the horn, they’re also tightly holding on to it. In the last few months, some countries in the region are finally realizing the great potential of cryptocurrency and its underlying technology.
Can blockchain help stop corruption in Nigeria?
The Nigeria Customs Service (NCS) is planning to venture into blockchain to eradicate corruption in its operations. According to local reports, NCS is piloting an application called Oracle’s Blockchain Cloud Service, which will help the agency manage its business processes and procedures in a bid to achieve a corruption-free environment. The platform will be used to document and keep track of products manufactured by local businesses, as well as keep records of licenses and permits.
While speaking to reporters the assistant Comptroller General to NCS, Aber Benjamin, said the agency expects to increase its revenue by 50% with the use of blockchain.
Corruption has become rampant in many African countries, slowly killing the financial sector all across Africa. Blockchain transparency will help NCS have clear records of all transactions undertaken. By rooting out corruption, NCS will be able to attain significant increment to its current $280 million monthly revenue.
According to reports, the new technology take will also encourage new businesses from the local communities and international communities as well. Businesses will be able to keep track of transactions and access the records at any time. This will also increase the level of confidence businesspersons have in the Nigeria custom office. As is currently the case, Nigerian businesses no longer trust institutions mandates with offering public services. They believe that corruption is deeply rooted in most institutions that offer public services in the country.
South Africa proposes new guidelines on crypto taxation
Recently, the South African Treasury has proposed some amendments to the country’s Taxation laws Amendment Bill (TLAB), which could pave the way for crypto trading to be exempted from value-added tax (VAT) in South Africa.
In April, the South African Revenue Service (SARS) started taxing cryptocurrencies and required all persons holding cryptocurrency as assets to submit profit and losses income tax returns. Those who failed to comply with these new regulations had to pay interests or face other penalties.
The newly proposed guidelines will clarify the cryptocurrency definition in the VAT Act and the loss provision in the Income Tax Act. According to a senior tax consultant, Tertius Troost, the new guidelines will help make things much clearer for cryptocurrency owners, particularly on how they should file their cryptocurrency taxes and how they apply to the VAT Act.
“If accepted, all dealing in cryptocurrencies will be exempt from VAT. This means there will be no VAT input claims on the acquisition of cryptocurrencies, and no VAT output being levied on the disposal of cryptocurrencies,” Troost said, adding that even VAT costs associated with mining might not have to be claimed within the tax filing.
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