Nigeria Implements 1% Withholding Tax on Cryptocurrency Transactions

Nigeria Implements 1% Withholding Tax on Cryptocurrency Transactions

Nigeria’s revenue authority has announced new tax regulations requiring cryptocurrency exchanges and peer-to-peer (P2P) marketplace operators to withhold and remit taxes from transactions involving virtual assets. The framework was officially published on July 31, 2026, by the Nigeria Revenue Service and detailed further on August 3, 2026.

Tax Withholding Requirements

Under the new rules, platforms must withhold 1% from proceeds of taxable cryptocurrency transactions, including security tokens and non-fungible tokens (NFTs). Stablecoin transactions are exempt from this withholding requirement, although specific tax obligations may still apply based on the nature of the transaction.

Additionally, the guidelines stipulate that income generated from staking, mining, airdrops, and decentralized finance (DeFi) activities may face a 10% withholding tax when categorized as taxable income.

Stamp Duty on Cryptocurrency Transfers

Transfers between fiat currency and tokens will incur a 1.5% stamp duty. The responsibility for collecting this stamp duty falls on the platform or marketplace facilitating the transfer, which must be collected from the virtual assets credited to the recipient.

Tax Treatment of Virtual Assets

Profits from cryptocurrency transactions are now taxable, marking a shift from the previous model that taxed crypto profits as capital gains. Current legislation states that ships gains from digital asset disposals are part of overall taxable income, which varies based on the taxpayer’s classification. Companies typically face a 30% income tax rate, while individuals are subject to progressive personal income tax rates.

Taxable events include selling, exchanging, or transferring assets that result in a change of beneficial ownership. Cryptocurrencies used for payments must be valued at their market price at the time of the transaction.

Reporting Obligations for Platforms

To comply with the new regulations, virtual asset service providers must register for tax purposes and maintain thorough records, including acquisition dates, costs, disposal values, fees, and parties involved in transactions. They are also responsible for connecting customer activities to Tax Identification Numbers and, where applicable, National Identification Numbers.

Furthermore, platforms are required to report any large or suspicious activities and keep transaction records for a minimum of seven years.

Developments in Nigeria’s Crypto Regulatory Framework

The new tax policy came under the directive of President Bola Tinubu, intended to formalize the approach to cryptocurrency regulation in Nigeria through the establishment of a Virtual Asset Council. This council aims to coordinate the efforts of existing regulators, such as the Central Bank of Nigeria and the Securities and Exchange Commission.

As the regulatory landscape evolves, exchanges and P2P operators are urged to adjust their systems to comply with these new requirements, preparing for further directives regarding token custody and tax remittance procedures.