Starting in 2026, cryptocurrency companies in Nigeria risk losing their licenses for evading taxes, which could result in a fine of ₦10 million.
Nigeria Enacts New Tax Laws for Crypto Operators
Nigeria is stepping up its efforts to bolster declining revenues by enacting new tax laws for Virtual Asset Service Providers (VASPs), effective from 2026. The Nigeria Tax Administration Act, 2025 (NTAA) was signed in June 2025, marking a significant milestone in the country's fiscal reforms.
Under the NTAA, VASPs that fail to comply with the regulations will face penalties. An initial penalty of ₦10 million ($6,693) will be imposed in the first month of default, followed by ₦1 million ($669) for every subsequent month.
The SEC, responsible for licensing and supervising VASPs, has already started issuing provisional licences. By August 2024, Quidax and Busha were among the recipients. The SEC categorised VASPs as cryptocurrency exchanges, peer-to-peer (P2P) platforms, and over-the-counter (OTC) desks in March 2024 and proposed to raise their minimum paid-up capital to ₦1 billion ($669,339) from ₦500 million ($334,669).
VASPs are now required to maintain accurate customer information to comply with Know Your Customer (KYC) requirements and keep records of all customer transactions and identification data for at least seven years after the date of the last transaction. They are also obligated to report large or suspicious transactions to the tax authorities and the Nigerian Financial Intelligence Unit (NFIU).
The NTAA specifies taxable transactions related to virtual assets, including the sale, exchange, or transfer of virtual assets, mining or staking activities, airdrops, bounties, or any form of virtual asset received as compensation or reward, and any other transaction or activity relating to virtual assets. Transactions made with virtual assets will be subject to the same tax treatment as transactions conducted in fiat currency, with the same value as the goods and services, determined at the market price at the time of the transaction.
The Finance Act of 2022 imposed a 10% tax on profits from digital assets in Nigeria, but it didn't work out. The new NTAA, however, is expected to take full effect in 2026, aligning Nigeria's tax laws on digital assets with Kenya (10% excise duty) and South Africa (up to 18% tax on crypto returns).
For users, taxes, especially Value-Added Tax (VAT), could mean higher transaction fees as operators pass costs to them. KuCoin, a global crypto platform, began charging 7.5% VAT on transaction fees in July 2024 to comply with the Federal Inland Revenue Service (FIRS)'s requirements.
Chimezie Chuta, founder and coordinator of Blockchain Nigeria User Group, believes that regulation and monitoring will make tax compliance easy. The new tax laws will result in higher compliance and regulatory oversight for crypto operators, ensuring a more secure and transparent digital asset market in Nigeria.
Nigeria is one of the largest crypto markets globally, receiving $92.1 billion in value between July 2024 and June 2025. The new tax laws are part of the government's strategy to tap into this vast potential and boost its revenue. However, the exact percentage of profit the law will charge as tax remains unclear.
As the country moves towards a more regulated digital asset market, it is expected that more VASPs will come into compliance, ensuring a more stable and secure environment for all participants.
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