Starting January 1, 2026, all individuals residing in Nigeria-whether citizens or foreigners who have lived in the country for six months or longer-will be subject to taxation on their worldwide earnings from digital assets. Simply holding cryptocurrencies abroad will no longer exempt one from Nigerian tax obligations.
For non-residents, taxation will apply solely to profits generated within Nigeria, such as transactions conducted on Nigerian exchanges or digital assets linked to Nigerian blockchain infrastructure.
Crypto exchanges and Virtual Asset Service Providers (VASPs) face stringent regulatory requirements. They must register with the Securities and Exchange Commission (SEC), maintain comprehensive Know Your Customer (KYC) records, and submit quarterly transaction reports to the Nigeria Revenue Service (NRS), formerly known as the Federal Inland Revenue Service (FIRS). Failure to comply could result in hefty penalties-starting at ₦10 million and ₦1 million monthly thereafter-and potential revocation of operating licenses.
Curious about how the government plans to enforce these new rules? Here’s an overview.
Enforcement will heavily depend on blockchain forensic tools, mandatory reporting from exchanges, and collaboration between government agencies. The International Monetary Fund (IMF) has also encouraged Nigeria to clamp down on informal channels that circumvent capital flow regulations.
A widely shared video on X, posted by Duru Bond, features tax specialist Taiwo Oyedele explaining the changes during a panel discussion, reinforcing this approach.
Oyedele explained that under the previous system, crypto gains were taxed at a flat 10% rate without accounting for losses. The 2025 legislation introduces a netting mechanism where gains are offset by losses before income tax is applied.
He further noted protections for smaller investors: transactions with proceeds below ₦150 million and gains under ₦10 million may be exempt from tax. He cautioned, “Self-reported data and exchange disclosures will be cross-checked.”
Which crypto activities are taxable under the updated laws?
The revised tax framework triggers tax liabilities upon the disposal of digital assets. Simply holding cryptocurrencies does not incur tax until you convert or exchange them.
“Disposal” encompasses selling crypto for fiat currency, swapping one digital token for another, or using crypto to purchase goods or services. Taxable gain is calculated as the difference between the disposal value and the original acquisition cost, including transaction fees.
A significant update is that losses from digital asset transactions can now be deducted-but only against gains within the same category of digital assets. This contrasts with previous rules where losses were seldom deductible.
The Nigerian Tax Authority broadly defines “digital or virtual assets” to include cryptocurrencies, tokens, NFTs, and other digital representations of value.
Those engaged in mining or large-scale validation activities will likely have their earnings classified as business income. Additionally, rewards from staking, airdrops, or yield farming are considered taxable income or gains under the new legislation.
What tax rates will apply to crypto investors?
According to the Nigeria Tax Act (NTA) 2025, profits from digital assets are now integrated into the general income tax system. This replaces the previous flat 10% Capital Gains Tax (CGT) with progressive rates that can reach up to 25% for individuals.
Exemptions remain for smaller transactions: if your total proceeds are below ₦150 million and gains under ₦10 million, you may not owe tax on those trades.
For instance, intermediate-level traders might face effective tax rates between 6% and 8%, depending on their income bracket, while high earners could be taxed at the top rate of 25%. Businesses operating crypto platforms or trading ventures will be subject to the standard corporate tax rate of 30% on net profits.
Key developments in Nigeria’s crypto taxation landscape
Nigeria’s cryptocurrency market has experienced rapid growth. Despite the Central Bank of Nigeria’s 2021 ban on bank-facilitated crypto transactions, peer-to-peer trading flourished underground, with billions of dollars flowing through platforms like Binance, fueling economic aspirations amid challenging times.
However, mid-2025 marked a turning point. Comprehensive tax reforms under the Nigeria Tax Act (NTA) 2025 and the Investments and Securities Act (ISA) 2025 brought digital assets into formal regulatory focus.
Digital currencies, NFTs, and tokens are now treated similarly to stocks or real estate for tax purposes. From January 1, 2026, compliance with these laws becomes mandatory for everyone-from long-term Bitcoin holders to active altcoin traders.
This shift is significant. Previously, crypto operated in a regulatory grey area. The 2021 Central Bank directive pushed much of the market underground, yet by mid-2023, peer-to-peer crypto trading in Nigeria had surged to $56.7 billion, according to Chainalysis.
Meanwhile, the SEC’s 2022 guidelines began classifying cryptocurrencies as securities. The 2025 legislation finalized this stance: in April 2025, President Tinubu signed the ISA 2025, explicitly designating digital assets like Bitcoin as securities under SEC jurisdiction.
On June 26, 2025, the Nigerian government enacted the Nigerian Tax and Nigerian Tax Administration Acts 2025, consolidating previous tax laws and explicitly including “digital assets” as taxable property.
This means cryptocurrencies in Nigeria are no longer operating in the shadows; their taxable status is now firmly established by law.
Practical implications and how to get ready
- Plan for tax payments: anticipate tax rates ranging from 5% to 25% on net crypto profits. Frequent traders should factor this into their financial strategies.
- Maintain thorough records: track all purchases, sales, dates, fees, token swaps, airdrops, and staking rewards. Utilize crypto tax software to accurately calculate cost basis across multiple blockchains.
- Classify your holdings: separate long-term investments from active trading to streamline tax reporting.
- Seek advice from crypto-savvy tax professionals early: don’t wait until 2026 to understand your obligations.
- Use compliant platforms: ensure your exchange or wallet provides detailed, exportable transaction histories. Transparent audit trails will be crucial for compliance.
- Stay updated on NRS and SEC announcements: watch for guidance on valuation methods, reporting standards, or potential safe harbor provisions released quarterly.
- If you operate a crypto business or platform, upgrade your systems to meet reporting, KYC, and audit requirements.
Also see: How to calculate your income tax as a Nigerian freelancer and remote worker
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