(EXPLAINER) New crypto tax: Who pays, how much, what’s exempt, penalties

The Nigeria Revenue Service has released comprehensive guidelines on how cryptocurrency and other virtual asset transactions will be taxed under the Nigeria Tax Act, 2025, marking the country’s most detailed tax framework for digital assets to date.

The guidelines, issued on July 31, 2026, explain how NRS intends to tax cryptocurrencies, stablecoins, NFTs and other digital assets in Nigeria.

It also provides rules on who must pay tax, which transactions are taxable, how assets should be valued, how to file and the obligations of taxpayers and Virtual Asset Service Providers.

Below are the key things individuals and businesses should know.

Who is affected?

Crypto/virtual asset taxes apply to virtually everyone involved in virtual asset transactions.

This includes individuals and companies that buy, sell or exchange cryptocurrencies and other digital assets, earn income in crypto, or provide services related to virtual assets.

In practical terms, the rules affect cryptocurrency investors and traders, exchanges, Virtual Asset Service Providers, Peer-to-Peer marketplace operators, wallet providers, brokers, NFT creators and investors, miners, and users earning staking or DeFi rewards.

Others are recipients of airdrops and hard forks, freelancers and consultants paid in cryptocurrency, employees whose salaries are paid in crypto, businesses accepting digital assets as payment, and non-resident entities with taxable virtual asset activities in Nigeria.

Which digital assets are covered?

The guidelines classify virtual assets into six categories: cryptocurrencies and exchange tokens, stablecoins, investment tokens, utility and governance tokens, NFTs, and CBN digital currencies.

Cryptocurrencies and exchange tokens include Bitcoin, Ether, Solana and BNB. They are subject to income tax on gains from disposal and stamp duty on eligible token transfers.

Stablecoins include USDT, USDC, BUSD, DAI and PayPal USD. Gains from disposal are taxable, while token transfers may attract stamp duty. However, any investment yield earned on stablecoins is taxed under separate rules applicable to investment returns.

Security and investment tokens are tokenised shares, bonds and revenue-sharing tokens. They attract income tax on gains and stamp duty on eligible transfers, although tokenised Nigerian stocks retain the tax exemption already applicable to ordinary Nigerian shares.

Utility and governance tokens include gaming tokens, DAO governance tokens, staking derivative tokens and access tokens. Gains from disposal are taxable, while staking rewards, DeFi yields and liquidity rewards are treated as taxable income when received.

NFTs are covered, but their tax treatment depends on whether the owner is the creator, investor or trader. Income earned by NFT creators is treated differently from gains realised by investors selling NFTs.

Which assets are exempt?

The NRS specifically excluded the eNaira and other Central Bank Digital Currencies (CBDCs).

These digital currencies will continue to receive the same tax treatment as conventional fiat currencies, meaning no special virtual asset tax obligations apply to them.

Every taxable event

The guidelines list several transactions that attract tax, depending on the nature of the activity.

These include:

Buying virtual assets with fiat currency through a VASP or P2P escrow platform (stamp duty applies).
Converting naira to crypto for cross-border business payments through an intermediary.
Selling cryptocurrencies and other virtual assets for fiat currency.
Swapping one virtual asset for another (token-to-token exchanges).
Paying for goods or services with cryptocurrency.
Receiving salaries or employment benefits in cryptocurrency.
Receiving consultancy or professional fees in crypto.
Mining rewards.
Staking rewards.
DeFi rewards, liquidity mining rewards and lending rewards.
Airdrops and hard fork distributions where the tokens have a market value.
First sale of NFTs by creators.
Resale of NFTs by investors.
Disposal of wrapped tokens and DeFi receipt tokens through sale, exchange or use as payment.

Every non-taxable event

The NRS also listed transactions that do not trigger tax on their own.

These include:
Simply holding cryptocurrency or other virtual assets without selling them. Unrealised gains are not taxable.
Transferring crypto between wallets owned by the same individual, provided ownership does not change.
Locking tokens into a staking protocol. Tax arises only when rewards are received.
Minting or creating an NFT. Tax begins only when the NFT is sold or transferred for value.
Tokenising real-world assets where ownership remains unchanged.
Receiving loans backed by cryptocurrency collateral.
The transfer of a virtual asset itself does not automatically attract VAT.
Wrapping tokens, such as converting Bitcoin to Wrapped Bitcoin, where beneficial ownership remains unchanged.
Depositing crypto into DeFi protocols in exchange for receipt tokens, provided ownership is retained and no value is realised.

How much tax will Nigerians pay?

The amount payable depends on the type of transaction.

Income tax

Individuals who earn profits or gains from selling virtual assets will pay income tax at the rates applicable under the Nigeria Tax Act.

Companies will also pay company income tax on taxable profits from virtual asset activities. Income from mining, staking, DeFi rewards, salaries, consultancy fees and similar receipts is also subject to income tax.

1% withholding tax

For cryptocurrencies, security tokens and NFTs (Categories 1, 3 and 5), 1 per cent withholding tax will be deducted from the gross disposal proceeds, not from the profit made on the transaction.

The withholding tax serves as a credit against the taxpayer’s final annual income tax liability. Stablecoins are exempt from this withholding tax.

1.5% stamp duty

A 1.5 per cent stamp duty applies whenever fiat currency is converted into tokens or tokens are converted back into fiat.

The duty is borne by the buyer (the transferee of the token) and is deducted by the VASP from the tokens credited to the buyer rather than from the cash paid.

7.5% VAT

Virtual assets themselves are not subject to VAT.

However, VAT at 7.5 per cent applies to services provided by VASPs and other service providers, including exchange fees; brokerage commissions; custody fees; wallet management fees; listing fees; advisory services; transaction facilitation fees; and other taxable digital services.

Where cryptocurrency is used to buy goods or services, VAT applies to the underlying goods or services, not to the cryptocurrency itself.

30% company income tax

Companies, including Virtual Asset Service Providers, will generally pay 30 per cent company income tax on taxable profits from virtual asset businesses, subject to the provisions of the Nigeria Tax Act.

This applies to profits from activities such as crypto trading, exchange operations, custody services, wallet administration, token issuance, mining, staking, DeFi activities and other virtual asset-related businesses.

How gains are calculated

According to the new framework, gains are not calculated solely in naira. Instead, the NRS introduced a dollar-referenced gain method to ensure taxpayers are taxed only on the real investment gain rather than gains resulting from naira depreciation.

The calculation follows five steps:

Determine the asset’s cost in US dollars at the time it was acquired.
Determine its value in US dollars when it is sold or exchanged.
Calculate the dollar gain or loss.
Convert the dollar gain into naira using the CBN/NAFEM exchange rate on the disposal date.
Compute the tax due on that naira gain. Any withholding tax already deducted by a VASP can be claimed as a tax credit.

Where tokens are not directly priced in US dollars, taxpayers must derive their value from approved market price aggregators. If no reliable market price exists, taxpayers are required to document their valuation method and retain the records for six years.

The guidelines also allow taxpayers to offset virtual asset losses against virtual asset gains during the same year.

However, crypto losses cannot be used to reduce tax on non-crypto income. Capital losses may be carried forward indefinitely to offset future virtual asset gains.

Penalties for non-compliance

The guidelines prescribe penalties for individuals, companies and VASPs that fail to comply.

Some of the key sanctions include:

Failure to register: ₦50,000 for the first month and ₦25,000 for every subsequent month.
Failure to file returns: ₦100,000 for the first month and ₦50,000 for each additional month.
Failure to keep records: ₦50,000 for companies and ₦10,000 for individuals.
Failure to deduct withholding tax: 40 per cent of the amount that should have been deducted.
Failure to remit tax deducted: 10 per cent per annum, plus the applicable CBN Monetary Policy Rate interest and the outstanding tax.
VASP or P2P marketplace non-compliance: ₦10 million for the first month and ₦1 million for each subsequent month.
False VAT refund claims: 100 per cent of the amount claimed plus interest.
Non-payment of tax: 10 per cent of the tax due plus applicable interest.
Failure to respond to tax notices: ₦100,000 on the first day and ₦10,000 for each subsequent day.
Failure to disclose facts relating to dutiable instruments may also attract fines and imprisonment upon conviction.

How to register

Anyone engaged in virtual asset activities must register for tax purposes and obtain a Tax Identification Number (Tax ID).

Virtual Asset Service Providers and P2P escrow operators are required to make a valid Tax ID a condition for opening an account on their platforms.

How to file annual returns

Taxpayers earning income from virtual assets are required to declare the income in their annual tax returns, together with all supporting documents prescribed by the relevant tax authority.

Where withholding tax has already been deducted by a VASP, the amount will count as a tax credit against the taxpayer’s final annual liability. Any balance due must be paid, while excess credits may be refundable through the annual return process.

Employees whose salaries are paid in cryptocurrency will generally have PAYE deducted by their employers where applicable.

Where employers are non-resident or fail to deduct tax, employees must declare the income themselves in their annual returns.

Similar rules apply to freelancers and consultants receiving payment in virtual assets from non-resident clients.

Record-keeping requirements

NRS requires taxpayers to maintain adequate documentation supporting their virtual asset transactions.

These records include acquisition and disposal details, valuations, transaction dates, exchange rates, tax computations and any valuation methodology used where no market price exists.

In cases where a market value cannot readily be established, taxpayers must retain supporting records for at least six years.

VASPs are also required to maintain records in accordance with the Nigeria Tax Administration Act.

Responsibilities of exchanges and P2P platforms

The guidelines place significant compliance obligations on cryptocurrency exchanges, Virtual Asset Service Providers and P2P marketplace operators.

They are required to:

• deduct withholding tax from taxable transactions;
• collect stamp duty where applicable;
• charge and remit VAT on taxable services;
• remit all taxes collected within the prescribed timelines;
• file statutory tax returns; and maintain transaction records in accordance with tax laws.

For P2P transactions, the obligations depend on how the platform operates.

P2P marketplaces that hold assets in escrow or systematically facilitate virtual asset transactions have the same tax collection responsibilities as exchanges.

However, where transactions take place directly between users without any intermediary, taxpayers are responsible for declaring and paying the taxes through their annual self-assessment returns.