Nigeria sets 1% crypto tax withholding for exchanges

Nigeria’s revenue authority has issued detailed crypto tax rules requiring exchanges and P2P marketplace operators to collect, report and remit taxes arising from virtual asset transactions.

The Nigeria Revenue Service published the Guidelines on Taxation of Virtual Assets on July 31. The agency announced the framework publicly on Aug. 3, saying it explains how the Nigeria Tax Act 2025 and Nigeria Tax Administration Act 2025 apply to digital assets.

One of the most unusual requirements concerns the form of payment. Income tax deducted at source and stamp duty must be remitted to the NRS in the token used for the underlying transaction. VAT must instead be paid in the currency used for payment, according to the guidelines.

Platforms must withhold 1% of the proceeds from taxable disposals of cryptocurrencies, security tokens and applicable nonfungible tokens. The deduction serves as an advance payment toward the taxpayer’s final income tax bill rather than a separate final tax.

Sales involving stablecoins are exempt from that 1% withholding requirement. The exemption does not necessarily remove every possible tax obligation arising from stablecoin activity. The final treatment depends on the transaction, the taxpayer and whether income or a taxable gain arose.

Staking rewards, mining income, airdrops and returns from decentralized finance may attract 10% withholding when treated as taxable income. Platforms and P2P operators must make the deduction when they process covered payments.

The rules also apply a 1.5% stamp duty to transfers from fiat currency into tokens and from tokens into fiat currency. The platform or marketplace handling the transaction must collect the duty from the virtual asset credited to the recipient.

Nigeria no longer treats all crypto profits through the former standalone 10% capital gains model introduced by the Finance Act 2023. Under the 2025 reforms, gains from digital asset disposals form part of taxable income and follow the rates applicable to the taxpayer.

Companies other than qualifying small companies generally face a 30% income tax rate on taxable profits and gains. A small company is broadly defined as having annual turnover of no more than ₦100 million and fixed assets not exceeding ₦250 million. Individuals face progressive personal income tax rates.

Taxable events include selling, exchanging or transferring an asset when beneficial ownership changes. Crypto payments for goods or services must be valued at their market price on the transaction date and included in taxable income. The NRS requires valuations from recognized trading platforms.

Simply holding Bitcoin or another token is not taxable. Transfers between wallets controlled by the same owner also fall outside the tax net when beneficial ownership remains unchanged. Other exclusions include minting an NFT before its sale, receiving a crypto backed loan and locking tokens for staking before rewards arise.

Virtual asset service providers must register for tax purposes and maintain records showing acquisition dates, costs, disposal values, fees and counterparties. They must also file information allowing the NRS to identify taxable users and transactions.

The Nigeria Tax Administration Act requires registered platforms to connect customer activity with Tax Identification Numbers and, where applicable, National Identification Numbers, as crypto.news previously reported. Reports can include customers’ names, addresses, telephone numbers, email addresses and transaction values. Platforms must also report large or suspicious activity and retain identification and transaction records for at least seven years.

The framework explicitly includes P2P marketplace operators. This closes a collection gap that could arise when buyers and sellers trade through a matching platform rather than a conventional centralized exchange.

President Bola Tinubu directed the NRS to issue the tax policy through a July 18 executive order. The order created a Virtual Asset Council chaired by the Central Bank of Nigeria, with the NRS and Securities and Exchange Commission serving as vice chairs.

The council coordinates existing regulators rather than replacing them, as crypto.news reported in related coverage. The SEC retains authority over securities related assets, while the central bank oversees payment, settlement and custody services involving nonsecurity assets.

Nigeria’s Senate is separately considering the Virtual Asset Service Providers Regulation Bill 2026. The measure passed its second reading in June and moved to the Senate Committee on Capital Market. It would establish licensing and compliance requirements for exchanges and other digital asset businesses if enacted.

The immediate next step falls on exchanges and P2P operators. They must adjust transaction systems, customer records and remittance processes to meet the NRS requirements. Further guidance may be needed on token custody, conversion procedures and how the agency will receive and account for taxes paid in multiple digital assets.