Virtual assets such as cryptocurrencies, tokens, and digital collectibles will now be taxed in Nigeria in the same way as transactions conducted in regular money (fiat currency), under the Nigeria Tax Administration Act (NTAA) 2025.

Section 79 of the Fifth Schedule of the Act requires anyone engaged in virtual asset activities—trading, exchanging, holding, or issuing digital currencies—to register with tax authorities as a Virtual Asset Service Provider (VASP).

Licensed VASPs must also obtain approval from the relevant exchange commission before commencing operations while the Securities and Exchange Commission (SEC) will oversee virtual assets that meet the criteria of a security.

These include investments where money or other assets are pooled in a common enterprise, investors expect profits, and returns depend on the efforts of promoters or third parties.

The NTAA identifies several virtual asset activities as taxable, including the sale, exchange, or transfer of digital assets, mining or staking that generates income, receiving digital assets as rewards, airdrops, or bounties, and any other transaction involving virtual assets. All taxable transactions will be treated in the same way as fiat currency transactions.

The value of virtual assets for tax purposes will be determined using prevailing market prices at the time of the transaction, as provided by recognised virtual asset exchange platforms approved by tax authorities. Recipients must report virtual assets as income and pay taxes accordingly.

VASPs are required to report large or suspicious transactions to the Nigerian Financial Intelligence Unit (NFIU) and comply with anti-money laundering (AML) laws. They must maintain accurate records of customer transactions for at least seven years and verify customers’ identities according to Know Your Customer (KYC) rules.

The Act further requires VASPs to implement strong cybersecurity measures to protect customer data and conduct internal audits to ensure compliance with tax, AML, and KYC regulations. Under the NTAA, virtual assets include cryptocurrencies, tokens, and digital collectibles but do not cover national or foreign currencies, electronic money licensed by the Central Bank of Nigeria (CBN), loyalty points or reward systems, or digital assets already regulated under the Investments and Securities Act.

The NTAA’s provisions mark a major step toward regulating Nigeria’s growing digital asset market, promoting tax compliance, transparency, and protection against financial crimes. While the SEC has approved tokenized asset exchanges, full-scale crypto trading has yet to receive formal approval. Nigeria has historically restricted crypto trading, including a 2021 ban on many centralized exchanges and bank access to cryptocurrencies, although some platforms remain available to residents. Emerging markets, including Nigeria, are increasingly adopting digital assets amid economic pressures, with central bank digital currencies (CBDCs) playing a growing role.

Data provider Statista reports cryptocurrency penetration in Nigeria at 1% in 2023, projected to rise to 3% by 2027.

Bankless newsletter writer Donovan Choy observes that citizens in countries facing hyperinflation, such as Turkey, Venezuela, and Argentina, have increasingly turned to cryptocurrencies as a financial safe haven, a trend relevant to Nigerians. The Central Bank of Nigeria continues to encourage the use of alternative digital banking channels, including internet banking, mobile apps, debit cards, and the eNaira, as part of efforts to boost financial inclusion and reduce reliance on cash.

This version reads as a single flowing news report, keeping all key details, regulatory context, and market perspective, while removing fragmented paragraphs and bullet points. (Nigerian Tribune)

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