Nigeria has introduced a tax on gains from virtual assets, signaling a major shift in its cryptocurrency policy. The new rules impose a 10% capital gains tax on profitable disposals of digital assets, including cryptocurrencies, NFTs, and security tokens. Income from mining and staking now faces progressive tax rates between 7% and 24%, while a 7.5% value-added tax applies to platform transaction fees.
The shift from ban to regulation
Four years ago, the country’s central bank prohibited cryptocurrency transactions, forcing traders into peer-to-peer networks. That position changed with the Finance Act 2023, which broadened the definition of “chargeable assets” to include digital currencies. The Investment and Securities Act 2025, signed in May, solidified the reversal by classifying virtual assets as securities under the oversight of the Securities and Exchange Commission.
The Federal Inland Revenue Service (FIRS) projects the tax regime will generate up to 200 billion naira ($250 million) annually. Nigeria aims to collect 25 trillion naira ($16.6 billion) in federal taxes for 2025, a critical target in a nation where 65% of GDP operates outside formal channels. The policy also covers offshore holdings, requiring residents to report and pay taxes on foreign crypto wallets.
KuCoin was the first major exchange to comply, adding the 7.5% VAT on trading fees for Nigerian users in July 2024. Local platforms like Busha and Quidax have since received provisional approval from the SEC, while Binance faces legal action over alleged non-compliance.
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The regulations show a detailed grasp of digital asset markets. Unlike traditional capital gains, crypto losses can only offset other digital asset profits—a rule meant to prevent tax avoidance while addressing the volatility of cryptocurrency trading. This difference has forced some traders to rethink their strategies, especially those who benefited from tax-free gains during years of unclear rules.
Mixed reactions online
Social media has exploded with debate since the announcement. Traders and influencers on Twitter and TikTok are divided between welcoming regulatory clarity and worrying about stifled growth. Some argue the taxes could drive activity underground, particularly among younger Nigerians who turned to crypto to protect savings from 32% inflation and a weakening currency.
In Lagos, acceptance of the rules appears stronger. Traders there have started sharing tax optimization tips in Facebook groups. Legal and tax advisory firms report a surge in demand, with businesses now seeking guidance on compliance.
The response varies by region and age. While Lagos traders seem more open to taxation in exchange for legitimacy, users in Abuja and northern cities express concerns about compliance costs. The tension between tax demands and ongoing banking restrictions—where crypto transactions remain partially blocked—has sparked controversy. Advocacy groups argue the government cannot expect revenue from an ecosystem it still limits.
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New crypto tax services have appeared to meet demand, promoting expertise in the new rules. These platforms report growing interest from individuals and businesses, indicating that despite early resistance, the reality of taxation is taking hold. Still, questions linger about how well the government can enforce the rules, especially against offshore holdings.
The policy is now active, and Nigeria’s crypto market is adapting. FIRS has not released compliance data, but early signs suggest a mixed response. Some traders are declaring gains, while others wait to see how strictly enforcement will be applied. The outcome could influence digital asset regulation across Africa.
Nigeria’s central bank has also strengthened ties with counterparts in emerging markets. A recent partnership with Brazil’s central bank aims to share best practices in digital finance and monetary policy.
