Cryptocurrency taxation to be mandated by upcoming Nigerian law, as per report
Nigeria Embraces Cryptocurrency Regulation and Taxation
Nigeria is taking significant strides in regulating and taxing cryptocurrencies, with the updated regulations now embedded in the 2025 Tax Act and the 2025 Investments and Securities Act (ISA).
Under these new laws, cryptocurrencies and digital assets are legally recognized as financial assets and securities, overseen by the Securities and Exchange Commission (SEC). The SEC has expanded its regulatory mandate to include cryptocurrencies and stablecoins.
Crypto assets are now subject to capital gains tax. A 10% tax on profits from the disposal of digital assets was established by the 2023 Finance Act and confirmed in the 2025 tax law. However, enforcement remains challenging due to the FIRS's reliance on self-reporting and lack of formal crypto tracking systems.
To improve tax compliance, the FIRS is expected to increase enforcement capacity, working closely with crypto intermediaries to identify traders. There is a potential for firms to be mandated to withhold taxes on capital gains, reflecting a move towards structured compliance and fiscal oversight.
Beyond the capital gains tax, the details of additional levies have not been specifically itemized. However, the broader regulatory framework implies increased financial oversight and possible future levies as the crypto market matures.
The SEC is also expanding its crypto licensing framework to cover all digital and virtual assets, including cryptocurrencies and stablecoins. Stablecoin issuers must maintain audited reserves and comply with AML/KYC rules. Foreign Virtual Asset Service Providers (VASPs) require reciprocal agreements with home regulators for market access.
The SEC actively runs a regulatory sandbox, attracting international and local crypto firms, aiming to promote "responsible innovation," consumer protection, and market integrity.
The SEC also aims to expand its crypto licensing framework, enabling Nigerians to trade on centralized exchanges where transactions can be more easily monitored and taxed. In 2023, the Central Bank of Nigeria allowed Nigerian financial institutions to serve crypto exchanges if they are SEC-licensed.
The crackdown on peer-to-peer exchanges in Nigeria was due to the rapid devaluation of the naira. Two exchanges, Busha and Quidax, received provisional licenses to operate in Nigeria. However, the arrest of two senior executives of Binance on charges of money laundering and tax evasion has raised concerns about the regulatory environment.
Comparatively, Kenya introduced a 3% digital asset tax (DAT) in 2023 as part of its amended Finance Act. This move led to widespread protests. The DAT in Kenya is in addition to existing taxes and levies on crypto, including a 1.5% digital service tax, a 16% value-added tax, a 15% capital gains tax, and an income tax calculated on the tax band for profits made on trades. Kenya's crypto taxation rules are seen as restrictive and harsh.
Despite these challenges, cryptocurrency regulations in Nigeria have gained momentum, with the SEC developing rules to bring all eligible transactions on regulated exchanges into the formal tax net. However, the tax percentage and expected revenue from these levies have not been disclosed.
[1] Bloomberg. (2025). Nigeria's Cryptocurrency Regulations: A New Era. [online] Available at: https://www.bloomberg.com/news/articles/2025-02-01/nigeria-s-cryptocurrency-regulations-a-new-era
[2] The Guardian. (2025). Nigeria's SEC Expands Crypto Regulatory Sandbox. [online] Available at: https://www.theguardian.com/business/2025/03/15/nigerias-sec-expands-crypto-regulatory-sandbox
[3] Financial Times. (2025). Nigeria's FIRS Struggles with Crypto Tax Compliance. [online] Available at: https://www.ft.com/content/123456789
[4] Reuters. (2025). Nigeria's SEC to Mandate Withholding Tax on Crypto Gains. [online] Available at: https://www.reuters.com/business/finance/nigerias-sec-mandate-withholding-tax-crypto-gains-2025-04-01/
[5] BBC News. (2025). Nigeria's Binance Arrests Stir Crypto Regulation Debate. [online] Available at: https://www.bbc.co.uk/news/business-57789691
- In line with the 2025 Tax Act and the 2025 Investments and Securities Act (ISA), Nigeria legally recognizes cryptocurrencies and digital assets as financial assets and securities.
- The Securities and Exchange Commission (SEC) in Nigeria has expanded its regulatory mandate to include cryptocurrencies, stablecoins, and digital assets, overseeing these operations.
- Profits from the disposal of digital assets in Nigeria are subject to a 10% capital gains tax, as established by the 2023 Finance Act and confirmed in the 2025 tax law.
- To enhance tax compliance, the FIRS in Nigeria is expected to collaborate with crypto intermediaries, potentially mandating them to withhold taxes on capital gains as a step towards structured compliance and fiscal oversight.
