Policy

Nigeria set to tax individual crypto transactions and exchanges in 2026

Individual crypto transactions will now be subjected to a maximum of 25% personal income tax on profit made.

Nigeria’s new tax regime, set to take effect in 2026, will compel cryptocurrency exchanges registered in the country to report user transactions or face heavy penalties, including license revocation.

The government passed the Nigerian Tax and the Nigerian Tax Administration Acts 2025 into law on June 26, 2025, indicating that the provisions are now binding.

Dive in

The tax act stipulates that profit from transacting with digital assets will now be regarded as ‘chargeable gains’ and liable to income tax charged up to 25% for individuals.
This overrides the 10% capital gains tax earlier imposed on digital assets by the Finance Act of 2022, as capital gains are now charged through personal and corporate income tax.
The tax implies that any gain from the sale or liquidation of a digital asset is subject to income tax.
On the other hand, virtual asset service providers (VASPs) are liable to pay a 30% corporate income tax on profits from their operations, mostly through transaction fees.

How are the taxes to be remitted?

The act mandates VASPs to report transaction details to the tax authorities for tax purposes.
These details, explicitly stated in the law, include a description of the transaction, the date, the type and value of assets involved, any sale of virtual assets and the personal details of persons involved in the transaction.
Any VASP that defaults in this risks an ‘administrative penalty’ of ₦10 million in the first month and ₦1 million for every subsequent month of defaulting, the act read.
In addition, they may also lose their licenses temporarily via suspension or permanently via revocation by the Nigerian Security and Exchange Commission (SEC).

Zoom in

The new act does not explicitly mandate a specific tax to cryptocurrencies akin to the digital asset tax (DAT) in Kenya.
Instead, its provisions cover gains from the exchange or sale of assets and the total income VASPs rake in from transaction fees.
Unlike the DAT —scrapped earlier in the year— which mandated a 3% charge on the gross value of the sale or exchange of a token without regard for profit or loss, the Nigerian tax regime is applied exclusively to profit made.

Blurry lines

The new tax law leaves a lot to interpretation and does not specifically cover other aspects of crypto use.
For example, while profit on direct crypto transfers is taxed, the law is not specific about returns from crypto-based investment vehicles such as derivatives and exchange traded funds (ETFs).
However, some of these are indirectly covered by the existing capital gains and withholding tax provisions.
In addition, the regime relies on self-reporting, a method often exploited for tax evasion and avoidance.
But measures such as withholding and requiring exchanges to deduct these taxes at the source and remit to the tax agencies could prove pivotal.