New regulations from Nigeria's revenue authority mandate that cryptocurrency platforms and peer-to-peer (P2P) exchanges are now responsible for collecting, reporting, and remitting taxes. The framework includes a novel provision allowing some of these withheld taxes to be paid directly in digital tokens.

This framework clarifies how existing tax obligations extend to cryptocurrency disposals and rewards, specifying that certain withheld amounts can be paid using the original token involved in the transaction.

Tax Collection and Remittance Details

According to a document titled "Guidelines on Taxation of Virtual Assets," the Nigeria Revenue Service (NRS) has stipulated that both income tax withheld at the source and any applicable stamp duty “shall be remitted to the Service in the originating token of the transaction.” In contrast, the rules specify that value-added tax must be paid in the same currency that was used to facilitate the payment.

These new guidelines position cryptocurrency exchanges and P2P marketplaces as the central entities for handling withholding, reporting, and remittance duties, as required by the nation's existing legal framework.

Withholding Rates and Tax Liabilities

The regulations mandate that these platforms must withhold 1% of the proceeds generated from the taxable sale of crypto assets, security tokens, and applicable non-fungible tokens. For activities such as staking, mining, airdrops, and decentralized finance, a higher withholding rate of 10% is applied. Furthermore, a 1.5% stamp duty is imposed on transfers between tokens and fiat currency in both directions.

An important exemption is noted for stablecoin sales, which are not subject to the 1% withholding tax.

These withheld funds function as advance payments that are credited toward a taxpayer's total annual income tax obligation. For individuals, tax is calculated using progressive rates, whereas corporations, excluding small companies, are subject to a 30% tax rate.

Regulatory and Legislative Context

This new regulatory framework follows an executive order from President Bola Tinubu, which created a Virtual Asset Council. The council is chaired by the central bank, with the NRS and the Securities and Exchange Commission acting as vice chairs. The presidency had previously announced on July 18 that the NRS was set to introduce a policy for applying Nigeria’s tax legislation to virtual assets.

A wider-ranging tax reform in Nigeria became effective on January 1, governed by the Nigeria Tax Act and the Nigeria Tax Administration Act of 2025. This legislation formally categorizes digital assets as "chargeable assets." It also imposes a requirement on virtual asset service providers to report specific details about transactions, including customers' names, their contact information, and their Tax Identification Numbers.

The country's initial move to specifically tax gains from cryptocurrency sales occurred with the Finance Act 2023, which introduced a flat 10% capital gains tax. That approach was superseded by the framework established for 2025. The most recent guidelines now provide detailed procedures for valuing gains and managing the processes of tax withholding, remittance, and reconciliation.