Nigeria’s proposed tax regime for virtual assets is facing growing resistance from players in the country’s digital asset ecosystem, who argue that the framework taxes the movement of money rather than actual profits, a design they say could push the country’s estimated $92 billion cryptocurrency market offshore while hurting ordinary Nigerians who rely on digital assets for remittances, business payments and freelance income.
Though, they supported the federal government’s decision to bring cryptocurrencies into the tax system but rejected key provisions of the newly introduced guidelines, insisting that taxes should apply only to profits earned from crypto investments rather than every movement of digital assets.
Read also: New crypto tax rules spark industry concerns over 1.5% stamp duty
They said they are not opposed to taxation of the industry. Instead, they believe the current guidelines could inadvertently punish millions of Nigerians who never made a profit from crypto transactions.
For instance, Aisha Yusuf, who sends N2 million in USDT to her brother studying abroad, said, although she earns no investment profit because the transaction is simply a family remittance, she would still pay N30,000 in stamp duty on a single transfer. If she repeats the transaction four times a year, she claims her annual tax bill would rise to N120,000, despite merely transferring her own money.
Also, Bello Tunde, a small importer paying suppliers, said he imports goods and settles a supplier abroad for about $5,000 a month, roughly N7,000,000, converted through a Nigerian intermediary. The duty on each payment is N105,000, or about N1,260,000 a year. His net proft on that line of business is around N900,000. According to him, the tax on moving the money is larger than the profit the business makes, adding that he would have no choice left than to raise his prices, which means, his everyday customers have to pay the price.
For Judy Emeka, a nurse who invested N500,000 in cryptocurrency, after the market declined, he sold the asset for N394,000, losing more than N100,000. Yet he still paid N7,500 when entering the market, N5,910 in exit stamp duty and another N3,940 in withholding tax, permanently losing N13,410 in taxes despite making no profit.
Similarly, Christy Chinelo, a freelance designer who pays overseas clients in USDT, said she would continue paying income tax on her earnings while also incurring approximately N180,000 annually in conversion duties each time she converts those earnings into naira for daily expenses.
Still Ade Blessing, a student earning just N30,000 annually from blockchain rewards, would still be required to obtain a Tax Identification Number, maintain transaction records and file annual tax returns despite earning well below Nigeria’s N800,000 income tax threshold.
“We support the taxation of virtual assets. Nigerians who make money on crypto should pay tax on it, and platforms should be registered and report to the authorities. Our concern is narrow and specific. The Guidelines tax the movement of money rather than the profit on it,” Blessing stated.
Meanwhile, the Digital Assets Coalition, the industry alliance representing digital-asset participants and operators in Nigeria, said it backs taxing real gains, registering platforms, verifying customers, and requiring full transaction reporting, in line with the standards of the United Kingdom, South Africa, and Brazil.
However, the Coalition objects to the charges on the gross movement of money rather than on any profit earned.
The first is a 1.5 percent stamp duty on every conversion between naira and digital assets, never refunded and charged whether a person gains or loses.
The second is a one percent withholding deducted from the entire value of every sale, even where the seller made a loss.
A third concern is the requirement to remit taxes in tokens, which is inconsistent with the Nigeria Tax Administration Act, 2025, whose Section 39 mandates payment in currency.
“We support the taxation of virtual assets without qualification. Our concern is with a design choice that taxes the movement of money itself. This charge falls on a remittance to a student abroad, on a freelancer converting earnings already taxed as income, and on a trader in a year they lost money. That is not a tax on profit. It is a toll on participation,” said Obinna Iwuno, spokesperson of the Digital Assets Coalition.
The burden falls hardest on the young Nigerians who built the market as working infrastructure for global earnings, family remittances, and savings that survive Naira volatility. Because young users transact small and often, the levies compound fastest against their pattern of use. They bite even below the N10 million threshold the Nigeria Tax Act itself exempts and within the N800,000 income band taxed at zero, while filing burdens can exceed a student’s entire earnings.
“The framework is anti-youth in effect, even if not in intent. You cannot tax your way into the future by taxing the people building it,” Iwuno said.
Every comparable country has reversed course. India’s one percent transaction withholding saw regulated exchanges lose 81 percent of volume within four months, with over 90 percent of trading moving offshore within a year, according to the Esya Centre.
Kenya repealed its three percent transaction tax in 2025, and Turkey withdrew a similar levy in 2026.
The Coalition calls on the Nigeria Revenue Service to defer commencement and consult publicly, to tax real gains rather than movement, to collect taxes in Naira, to protect small earners, to retain registration and reporting in full, and to confirm that tax rates are set only by the National Assembly.
“This is not a fight against taxation. It is a request for a design that works for citizens and the Revenue Service alike. The Coalition stands ready to help make a workable framework succeed,” Iwuno added.
The spokeperson argues that the proposed taxes would dramatically increase the cost of using licensed Nigerian crypto exchanges.
According to him, regulated exchanges currently charge between 0.1 percent and one percent in trading fees, with the average standing at about 0.3 percent; adding a mandatory 1.5 percent stamp duty would increase customer costs by as much as 500 percent, making regulated Nigerian platforms significantly more expensive than offshore competitors.
He warned that rather than encouraging compliance, the higher costs would simply encourage users to migrate to foreign exchanges or unregulated peer-to-peer markets where Nigerian regulators would have little visibility over transactions.
Beyond the impact on individuals, Iwuno argues that the proposed framework could undermine the government’s own revenue ambitions.
According to him, Nigeria currently ranks as the second-largest country globally for grassroots cryptocurrency adoption, receiving tens of billions of dollars in on-chain transaction value annually, according to Chainalysis.
Most of those transactions currently pass through regulated exchanges that comply with Know Your Customer requirements and report activities to authorities.
He therefore warned that imposing high transaction taxes could drive users away from these compliant platforms towards offshore exchanges that neither report to Nigerian regulators nor collect Nigerian taxes.
“It drives the base out of sight,” he said, arguing that the country risks losing both tax revenue and regulatory visibility over one of Africa’s largest digital asset markets.
Rather than scrapping crypto taxation altogether, Iwuno is urging the Nigeria Revenue Service (NRS) to redesign the framework.
His recommendations include postponing implementation of the guidelines to allow wider stakeholder consultation, removing the 1.5 percent conversion duty and one percent withholding tax on gross sales, taxing only realised investment gains, collecting taxes exclusively in naira instead of virtual assets, protecting low-income users and students from excessive compliance requirements, while retaining mandatory registration and reporting obligations for exchanges.
Iwuno also called for tax rates to be determined through legislation by the National Assembly instead of administrative directives.
The debate reflects a broader question confronting policymakers: whether Nigeria can successfully expand its tax base without discouraging innovation in one of Africa’s fastest-growing digital economies.
Read also: Crypto tax rules pull traders out of shadows with TIN-first policy
For the Digital Assets Coalition, the answer lies not in rejecting crypto taxation but in redesigning it.
“This is not a fight against taxation. It is a request for a design that works for citizens and for the Revenue Service alike,” coalition posited.
The group argued that a tax system focused on actual profits rather than transactions would generate more sustainable revenue, cost less to enforce, keep crypto activity within regulated platforms and ensure ordinary Nigerians are not taxed simply for moving their own money.
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