Nigeria announces 15% crypto gains tax, but experts blame lack of clear regulations

The Nigerian government plans to introduce a new tax system for cryptocurrency profits from January 2026. While some industry experts have questioned the timing and effectiveness of this tax, others see it as a step toward recognizing cryptocurrencies as legitimate financial products.

Taxation and exemptions for traders

The Nigerian government plans to introduce a new tax regime for cryptocurrency profits, with the law expected to come into effect in January 2026. The development, confirmed by the President’s Committee on Fiscal Policy and Tax Reform, means that while crypto gains will be subject to personal income tax, losses will not be recognized as tax relief.

According to local reports, the new law focuses on realized profits from virtual assets. However, the tax system has significant tax exemption thresholds to protect small investors. The report quotes Taiwo Oyedele, chairman of the Presidential Committee on Fiscal Policy and Tax Reform, as saying that the first $545.82 (₦800,000) of annual net profits from crypto trading will be completely tax-free. Profits above this threshold are subject to 15% tax.

Importantly, the law currently ignores losses, so if a trader sells a virtual asset at a loss (for example, if he bought it for $2,000 and sold it for $1,500), the law states that the tax would be zero.

“If the net income is small and below the threshold ($545.82), the tax is 0%,” Oyedele acknowledged. “Investing in virtual currencies is not a crime.”

Under the new framework, the responsibility for compliance lies with both individual traders and virtual asset service providers (VASPs). The law also requires virtual currency exchanges to actively monitor and report customer transactions, including exchanges, sales, and transfers of virtual assets, to tax authorities. You must also report large or suspicious transactions to tax authorities and the Nigerian Financial Intelligence Unit (NFIU).

Penalties and regulatory credibility

Failure to comply will result in severe penalties for businesses, including fines of $6,693 for the first month and $669 for each subsequent month. Non-compliant operators also risk having their licenses suspended or revoked by the Nigerian Securities and Exchange Commission (SEC).

Oyedele expressed confidence in the new regime, saying, “I believe the current regime for virtual assets, including virtual currencies, is fair, balanced, and globally competitive.”

Reaction to the announcement was mixed, with some major players in Nigeria’s crypto industry questioning the wisdom of moving forward with taxing crypto transactions when the government’s stance on digital assets is still unclear.

Crypto market analyst Room Oofi said the move was a mistake, adding that the government “looks desperate”.

“I think the government is making the same mistake again in 2021 by banning crypto transactions from banks, and that fear persists,” Orfi said.

Mr. Orfi, former Executive Director of Stakeholders of the Blockchain Technology Association of Nigeria (SIBAN), like fellow experts, also questioned why the authorities would expect crypto-trading residents to pay taxes when they have blocked most of the crypto platforms used by them.

But some, like Roqqu founder and CEO Benjamin Eseoghene, welcome the move as a step toward recognizing cryptocurrencies as appropriate financial products. He added:

“And any financial product that behaves similarly to cryptocurrencies will be taxed, so this is just a natural progression of regulation that we have all been asking for for a long time.”

Meanwhile, Orfie urged the Nigerian government to follow in the footsteps of the Trump administration, which has embraced the crypto industry. To build similar relationships with the local industry, Mr. Orfi urged the Nigerian government to appoint an advisor on cryptocurrencies, blockchain and Web3.