Nigeria’s attempt to bring its rapidly expanding cryptocurrency market firmly into the tax net is facing an early test, with lawyers and digital-asset operators questioning whether the new regime could drive transactions away from regulated platforms, deepen the informal peer-to-peer market and ultimately make tax collection harder.
The concerns followed the release of new guidelines by the Nigeria Revenue Service (NRS), in collaboration with the Joint Revenue Board (JRB), for the taxation and administration of virtual assets in Nigeria.
The framework places taxpayers, Virtual Asset Service Providers (VASPs), peer-to-peer (P2P) marketplace operators, tax practitioners and other participants in the digital-asset ecosystem under a more structured tax-compliance regime.
While the government’s move gives Nigeria a clearer framework for taxing an industry that has operated in a regulatory grey area for years, industry reaction suggests that the bigger battle may now shift from whether crypto should be taxed to how far government can go in taxing it, who bears the cost and whether the rules can actually be enforced.
The legal battle over the 1.5% duty
At the centre of the controversy is the treatment of certain virtual-asset transfers under the new framework, including the application of a 1.5 per cent stamp duty in relevant transactions.
Olayimika Oyebanji, legal consultant to the House of Representatives Ad-Hoc Committee on the Economic, Regulatory and Security Implications of Cryptocurrency Adoption and PoS Operations, described the development as a major legal and policy concern.
Speaking to Pinnacle Daily, Oyebanji argued that Nigeria’s existing stamp-duty framework does not expressly identify blockchain or cryptographic ledger transfers as dutiable instruments.
He maintained that the Nigeria Tax Act 2025 and the Stamp Duties framework would require clearer legislative grounding if the government intends to impose a specific duty directly on digital-asset transfers.
Oyebanji said he and other stakeholders were already considering a legal challenge, claiming that 10 potential legal grounds had been identified.
“The legal basis is being tested,” he said, adding that the classification of virtual assets remains a foundational issue in determining the appropriate legal and regulatory treatment.
But that argument is already being contested.
The law does provide a tax framework.
Afrikanus Kofi Akosah Adusei, Executive Director of the Africa Web3 Institute, said it would be inaccurate to portray the NRS guidelines as having no legal foundation whatsoever.
He pointed to Item 33 of the Ninth Schedule to the Nigeria Tax Act 2025, although he acknowledged that an interpretive gap exists over whether the provision was intended to cover a cryptographic ledger state change.
The distinction is important.
The Nigeria Tax Administration Act 2025 expressly establishes a framework for the tax administration of virtual assets. Its Fifth Schedule provides for the registration of persons engaged in virtual-asset activities, including exchange, trading, custody and issuance, and identifies taxable virtual-asset transactions such as the sale, exchange or transfer of virtual assets, income-generating mining and staking, as well as airdrops and bounties.
Read the Nigeria Tax Administration Act 2025 — official Tax Appeal Tribunal copy.
Separately, the Nigeria Tax Act 2025 recognises digital and virtual assets as chargeable assets for the purpose of taxing gains.
The legal question, therefore, is becoming narrower and potentially more consequential: does the existing law authorise the specific mechanism being used to collect the 1.5 per cent duty on crypto-related transfers?
That could become the central issue if the dispute reaches the courts.
Why crypto users could simply move
For blockchain strategy consultant and fintech specialist Evans Joseph, the bigger danger is economic rather than purely legal.
He argued that applying a blanket transaction charge could encourage users and liquidity to migrate from Nigerian-regulated platforms to offshore exchanges, private wallets and informal P2P channels.
“I believe the bigger issue is that you can’t effectively tax what you don’t fully understand,” Joseph said, arguing that government should focus on taxing actual profits and business income rather than imposing charges that could discourage legitimate participation.
The concern is particularly relevant in Nigeria, where cryptocurrency use has developed alongside a large P2P ecosystem.
A policy that increases the cost of every transaction could therefore produce an unintended result: the more expensive the regulated market becomes, the stronger the incentive to transact outside it.
That would create a paradox for the government.
A policy designed to increase revenue and transparency could potentially reduce the number of transactions taking place where regulators can see them.
P2P transactions expose the enforcement gap.
The structure of blockchain technology presents another major challenge.
Bryan Allworthy of Bitmatters Limited questioned how the duty would work when a transaction involves unhosted wallets or when one party is located outside Nigeria.
The questions are fundamental.
If two individuals transfer crypto directly between private wallets, there may be no Nigerian exchange sitting in the middle of the transaction to collect the duty.
If one party uses an offshore platform, the enforcement problem becomes even more complicated.
And if the transaction takes place entirely on a decentralised network, the government may know that a blockchain transaction occurred without necessarily having an effective mechanism for identifying the parties or collecting the tax.
This is where Nigeria’s attempt to tax crypto encounters the technological architecture of crypto itself.
The government wants visibility into the market.
The NRS framework nevertheless gives the government significantly greater visibility over the formal crypto sector.
The Nigeria Tax Administration Act requires persons engaged in virtual-asset activities to register for tax purposes, while VASPs operating in Nigeria are required to obtain relevant regulatory approval and maintain records. The Fifth Schedule also sets out reporting and compliance obligations for VASPs.
Recent reporting on the NRS guidelines indicates that Tax Identification Numbers are to become an important part of account activation and compliance for crypto platforms, while qualifying corporate gains may be subject to company income tax.
This means the government is not simply introducing a new tax.
It is building a system intended to make the crypto economy identifiable, traceable and taxable.
The real cost may fall on platforms.
For VASPs, the issue is not only the amount of tax collected from customers.
Platforms may also face additional compliance costs associated with customer identification, transaction reporting, record keeping, tax deductions and regulatory coordination.
That could favour larger, well-capitalised operators capable of absorbing compliance costs while placing smaller Nigerian crypto businesses under greater pressure.
The result could be further consolidation of the formal market or the migration of smaller operators and users towards less visible channels.
Nigeria is trying to tax a market it is still learning to regulate
The timing of the new guidelines is significant.
Nigeria is simultaneously trying to establish itself as a major digital economy while strengthening its domestic revenue mobilisation.
The new tax laws provide a much clearer statutory foundation for dealing with virtual assets than existed under the previous regime. The Nigeria Tax Administration Act specifically addresses virtual assets, while the Nigeria Tax Act brings digital and virtual assets within the scope of chargeable assets.
The policy challenge is therefore no longer whether cryptocurrency exists outside the traditional financial system.
It is whether Nigeria can successfully bring it into the tax system without shrinking the very market it wants to regulate and tax.
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The emerging legal challenge could ultimately determine how Nigerian tax law applies to blockchain transactions that do not fit neatly into traditional concepts of an “instrument”, “transfer” or “transaction”.
For Oyebanji, the issue is one of statutory authority and administrative overreach.
For Adusei, the stronger challenge may lie in the interpretation of existing law, proportionality and the practical mechanics of imposing the duty.
For industry operators, the immediate concern is different: whether additional transaction costs will push users towards offshore platforms and unhosted wallets.
And for the NRS, the test is whether it can convert a difficult-to-tax digital economy into a dependable revenue source without driving economic activity beyond the reach of Nigerian regulators.
That makes the new crypto tax regime more than a revenue policy.
It is becoming a test of whether Nigeria can regulate a borderless digital economy using laws, institutions and enforcement mechanisms designed largely for a conventional financial system.
The answer could shape not only how Nigerians trade Bitcoin, Ethereum and other digital assets, but also whether Nigeria emerges with a larger, more transparent digital-asset economy or a more sophisticated underground one.
Esther Ososanya is an investigative journalist with Pinnacle Daily, reporting across health, business, environment, metro, Fct and crime. Known for her bold, empathetic storytelling, she uncovers hidden truths, challenges broken systems, and gives voice to overlooked Nigerians. Her work drives national conversations and demands accountability one powerful story at a time.