Nigeria's revenue agency has issued new guidelines requiring crypto platforms and P2P marketplaces to collect, report, and remit taxes on digital assets. Some withheld amounts must be paid in originating tokens, while VAT is due in fiat currency.
Nigeria's move to establish clear tax collection rules for digital assets signals a significant step in regulating its growing crypto market, potentially impacting investor confidence and platform operations within the country.
Nigeria's revenue agency has issued new guidelines requiring cryptocurrency platforms and peer-to-peer marketplaces to collect, report, and remit taxes on digital assets. Under the new framework, certain withheld tax amounts, including income tax deducted at source and stamp duty, must be remitted in the originating digital token of the transaction, according to the Nigeria Revenue Service (NRS).
Value-added tax, however, must be remitted in the currency used for payment. The guidelines place exchanges and P2P marketplaces at the center of withholding, reporting, and remittance processes under existing Nigerian tax laws. Platforms are mandated to withhold 1% of proceeds from taxable disposals of crypto assets, security tokens, and applicable non-fungible tokens. A higher 10% withholding rate applies to income from staking, mining, airdrops, and decentralized finance activities. Token-to-fiat and fiat-to-token transfers are subject to a 1.5% stamp duty.
These withheld amounts function as advance payments credited against a taxpayer's final income tax liability. Individuals are taxed at progressive rates, while companies, excluding small businesses, face a 30% tax rate. Notably, stablecoin sales are exempt from the 1% withholding tax.
The new guidelines follow an executive order signed by President Bola Tinubu that established a Virtual Asset Council, chaired by the central bank, with the NRS and the Securities and Exchange Commission as vice chairs. This policy aims to implement Nigeria’s tax laws for virtual assets, aligning with a broader tax overhaul that took effect on January 1, 2025, under the Nigeria Tax Act and Nigeria Tax Administration Act. These laws classify digital assets as chargeable assets and require virtual asset service providers to report customer transaction details, including names, contact information, and Tax Identification Numbers.