Nigeria’s 2025 Tax Act Clarifies Digital Asset Taxation

The Nigeria Tax Administration Act 2025 (NTAA) and other tax reform bills were signed into law by President Bola Tinubu on June 26, 2025. These acts classify income derived from digital asset activities, including trading, transfers, mining, staking, airdrops, or compensation in cryptocurrency, as formally taxable. Separately, the Investments and Securities Act 2025 (ISA), signed in December 2025, expressly includes virtual and digital assets within the statutory definition of securities, granting the SEC primary regulatory authority over such assets. On January 16, 2026, the SEC further issued a circular, “Circular No. 26-1: Revised Minimum Capital for Regulated Capital Market Entities,” raising capital requirements for digital asset exchanges (DAXs) and digital asset custodians to ₦2 billion ($1.4 million USD), a significant increase from the previous ₦500 million ($351,000 USD). Affected entities are mandated to comply with these new capital thresholds by June 30, 2027.

Under the new tax regime, capital gains from the sale or disposal of cryptocurrencies are subject to a 10% Capital Gains Tax (CGT) for individuals and companies, calculated on profits. However, if cryptocurrency trading is considered a business activity, profits are subject to progressive personal income tax rates ranging from 15% to 25% for individuals, and a corporate income tax of 30% for companies. Virtual Asset Service Providers (VASPs) are also liable to pay 30% corporate income tax on their profits, typically derived from transaction fees. Value Added Tax (VAT) at 7.5% may apply to fees charged by VASPs for services provided in Nigeria, but not directly on the digital assets themselves.

The revised capital requirements by the SEC mandate Digital Assets Offering Platforms (DAOPs) and Real-World Assets Tokenisation and Offering Platforms (RATOPs) to hold ₦1 billion ($703,000 USD), while Digital Assets Platform Operators (DAPOs) and Digital Assets Intermediaries (DAIs) are set at ₦500 million ($321,000 USD). Ancillary Virtual Asset Service Providers (AVASPs) must hold ₦300 million ($211,000 USD). Non-compliance for VASPs can result in an administrative penalty of ₦10 million in the first month and ₦1 million for each subsequent month, alongside potential license suspension or revocation.

The Nigerian government’s stated reasons for these legislative changes include a broader strategy to increase its tax-to-GDP ratio from under 10% to 18% by 2027. The integration of digital assets into the tax framework is seen as a crucial step to regulate the growing virtual asset market, prevent tax avoidance, and ensure compliance among individuals and businesses. Ejike Nwafor Esq, principal partner at Ejike Nwafor & Partners LLP, noted that the ISA 2025 specifically expands the SEC’s powers over digital finance and aims to align market conduct regimes with global standards. Femi Adegolu, co-founder of Tradepal AI, commented that the new tax reform will expose compliance loopholes in the crypto industry, stating, 2026 is going to be a big year for compliance.

While the NTAA 2025 clarifies many aspects of digital asset taxation, specific details on how the Federal Inland Revenue Service (FIRS) plans to enforce tax collection on individual, peer-to-peer transactions, beyond VASP reporting, remain to be fully elaborated. There is also ongoing interpretative tension regarding the precise definition of digital assets across various acts, which could lead to regulatory nuances in implementation.

The new regulations signal a move towards greater institutionalization of Nigeria’s digital asset economy. VASPs will be required to submit detailed monthly reports to tax authorities, including transaction types, dates, volumes, and customer identification information, necessitating robust compliance systems. The SEC’s increased capital requirements are expected to strengthen oversight, prioritize investor protection, and enhance market stability in the newly legalized sector, although some critics warn these rules could favor well-funded incumbents over early-stage local startups. The government anticipates that these reforms will create conditions for a more resilient digital economy and potentially position Nigeria as a leader in sustainable digital finance in Africa.

Digital asset holders and businesses operating in Nigeria should consult with tax professionals to understand the specific implications of the NTAA 2025 and ISA 2025 on their activities. It is advisable to maintain meticulous records of all digital asset transactions, including acquisition costs, dates, and disposal proceeds, to facilitate accurate tax computations. Virtual Asset Service Providers (VASPs) must review their operational frameworks to ensure full compliance with the new capital requirements by the June 30, 2027 deadline and implement systems for mandatory transaction reporting to tax authorities. Individuals engaged in digital asset activities should be aware of their potential income tax and capital gains tax obligations, which vary based on whether the activity is considered a business or an investment.