Cryptocurrency users in Nigeria are set to face higher transaction costs following the introduction of a new virtual asset tax framework by the Nigeria Revenue Service (NRS). The new rules apply taxes at multiple stages of a crypto transaction, significantly expanding the government's approach to taxing digital assets.

Unlike previous regulations that focused mainly on profits, the new framework introduces taxes on buying, selling, earning, and using cryptocurrencies. These include a 1.5% stamp duty on virtual asset transactions, a 1% withholding tax on the disposal of most cryptocurrencies, income tax on taxable gains, and Value Added Tax (VAT) on exchange service fees.

A ₦1 Million Crypto Trade Could Attract Over ₦64,000 in Taxes

Under the new guidelines, purchasing ₦1 million worth of Bitcoin immediately attracts a 1.5% stamp duty, reducing the amount of Bitcoin received to the equivalent of ₦985,000.

If the value of the Bitcoin later doubles and the investor sells the holdings, additional taxes apply. The buyer pays another 1.5% stamp duty on the acquired digital asset, while the seller is charged a 1% withholding tax on the transaction value. Combined, both parties could incur approximately ₦64,250 in taxes on the same trade, excluding exchange commissions, blockchain network fees, VAT on service charges, and any income tax that may arise from investment gains.

Profitable Investors May Face Additional Income Tax

The framework also introduces income tax on realized crypto gains above the annual exemption threshold. For example, an investor who purchases crypto worth ₦2.72 million and later sells it for ₦5.45 million would realize a gain of ₦2.72 million.

While the first ₦800,000 of annual gains is exempt, the remaining taxable amount would attract 15% income tax, resulting in an estimated tax liability of about ₦288,765. Depending on an individual's tax bracket, the applicable income tax rate can rise to 25%.

Government Targets Growing Digital Asset Market

The tax framework reflects Nigeria's efforts to integrate virtual assets into its broader tax system as crypto adoption continues to grow. According to industry estimates, the country recorded approximately $92.1 billion in cryptocurrency transaction value between July 2024 and June 2025, making it one of the world's largest crypto markets.

The government expects stamp duty collections to increase substantially over the coming years, with projected revenues rising from ₦456.07 billion in 2026 to ₦752.45 billion by 2028.

Stablecoins Also Affected

The new rules extend beyond volatile cryptocurrencies such as Bitcoin to include stablecoins like USDT and USDC, which are widely used by Nigerians for cross-border payments and settlements.

Purchasing stablecoins will now attract the same 1.5% stamp duty, while exchange services remain subject to VAT and any taxable gains may also incur income tax. According to the International Monetary Fund (IMF), stablecoins accounted for more than 65% of Nigeria's cryptocurrency inflows in 2024, highlighting their growing role in the country's digital economy.

Shift Toward Comprehensive Crypto Taxation

The NRS says a single crypto transaction can trigger multiple tax obligations because different taxable events occur throughout the lifecycle of a digital asset. This marks a significant departure from the Finance Act 2023, which introduced a 10% tax on gains from digital assets but saw limited enforcement.

Unlike jurisdictions such as the United States and the United Kingdom, where crypto investors are generally taxed only when profits are realized, Nigeria's new framework applies taxes at multiple stages of a transaction.

The policy represents one of the country's most comprehensive efforts yet to regulate and tax virtual assets. While it is expected to generate additional government revenue and strengthen compliance, its long-term impact on cryptocurrency adoption, investment activity, and cross-border digital payments remains to be seen.