Nigeria Unveils New Tax Regime for Virtual Assets

Where virtual assets are used to pay for taxable goods or services, VAT will apply to the underlying transaction just as it would for payments made in fiat currency.

The Nigeria Revenue Service (NRS) has released comprehensive guidelines on the taxation of virtual assets, introducing new compliance requirements for participants in the country's digital asset ecosystem and imposing a 10 percent withholding tax on income earned from mining, staking, airdrops and decentralised finance (DeFi) activities.

The guidelines, issued on August 3, 2026, establish a framework for the taxation of cryptocurrencies and other digital assets, covering registration, reporting, record-keeping, valuation and tax collection obligations for taxpayers, virtual asset service providers (VASPs), peer-to-peer (P2P) marketplace operators, tax practitioners and other participants in the sector.

Under the framework, virtual assets are classified into six categories: cryptocurrencies and exchange tokens, stablecoins and payment tokens, security and investment tokens, utility and governance tokens, non-fungible tokens (NFTs), and sovereign digital currencies such as the eNaira.

Multiple Taxes May Apply

The NRS said a single virtual asset transaction could trigger multiple tax liabilities, including income tax, value-added tax (VAT) and stamp duty, depending on the nature of the transaction.

For individuals, taxable income includes gains from the disposal of virtual assets, salaries paid in cryptocurrencies, professional and consultancy fees, business income, mining and staking rewards, DeFi earnings, liquidity mining incentives, protocol rewards, royalties, and taxable airdrops and hard fork distributions.

"Income shall be recognised at the fair market value of the virtual asset on the date the taxpayer acquires unrestricted ownership or control of the asset," the guidelines stated.

Companies are required to pay company income tax on profits generated from virtual asset trading, exchange operations, transaction fees, brokerage commissions, custody services, wallet administration, token issuance, mining, staking, DeFi activities and investment gains.

The guidelines also extend tax obligations to non-resident persons earning income from virtual asset activities in Nigeria, subject to the provisions on significant economic presence and Nigerian-source income.

VAT, Stamp Duty

While the transfer of ownership of a virtual asset does not, by itself, constitute a taxable supply for VAT purposes, the NRS said services such as exchange fees, brokerage commissions, custody services, wallet management, listing fees, transaction facilitation, advisory services and digital platform charges remain subject to the 7.5 percent VAT.

Where virtual assets are used to pay for taxable goods or services, VAT will apply to the underlying transaction just as it would for payments made in fiat currency.

The guidelines also impose a 1.5 percent stamp duty on fiat-to-token and token-to-fiat transactions, to be deducted by VASPs or VASP-operated P2P marketplaces.

Taxable, Non-Taxable Activities

Taxable events include purchases of virtual assets with fiat currency, cross-border naira-to-token conversions, sales executed through VASPs or P2P escrow platforms, and payments for goods and services using digital assets.

However, merely holding virtual assets, transferring assets between wallets owned by the same individual, staking lock-ups, NFT minting, tokenisation of real-world assets without a change in beneficial ownership, and loans secured by virtual assets are excluded from taxable events.

The NRS also clarified that the eNaira and other central bank digital currencies remain outside the virtual asset tax framework.

Withholding Tax Rates

Under the new regime, gains from the disposal of virtual assets will be taxed under the applicable provisions of the Nigeria Tax Act, with progressive rates for individuals and a 30 percent company income tax for companies that do not qualify as small businesses.

The framework introduces a one percent withholding tax on gross disposal proceeds from cryptocurrencies, security and investment tokens, and NFTs where applicable.

It also imposes a 10 percent withholding tax on income derived from staking, mining, airdrops and DeFi yields, while professional and consultancy fees paid in virtual assets will attract withholding tax of five or 10 percent, depending on the applicable tax rules.

Registration, Compliance

The guidelines require all persons engaged in virtual asset activities to register with the tax authority and obtain a Tax Identification Number (TIN). VASPs and P2P escrow operators must also ensure customers provide a valid TIN before activating accounts.

Failure to register attracts a penalty of ₦50,000 for the first month and ₦25,000 for every subsequent month of default.

Taxpayers who fail to file returns will pay ₦100,000 for the first month and ₦50,000 for each additional month of non-compliance.

The NRS also prescribed a 40 percent penalty for failure to deduct tax at source. VASPs and P2P marketplace operators that fail to comply with the guidelines face a ₦10 million fine in the first month and ₦1 million for each subsequent month of default.

Additional sanctions apply for failure to remit taxes, maintain proper records, respond to tax notices, disclose dutiable transactions and notify the tax authority of changes in business address.