Business
THE Digital Assets Coalition (DAC) has expressed concerns that Nigeria’s new virtual asset tax guidelines could encourage cryptocurrency activities to move offshore and slow youth participation in the sector.
Its Spokesperson, Mr Obinna Iwuno, stated this at a media conference organised by the coalition on Thursday in Lagos.
Iwuno said that although the coalition supported the taxation of digital assets, some provisions of the framework appeared to target the movement of funds rather than actual profits.
He said the group backed the taxation of gains from virtual assets, customer verification and stricter reporting requirements for operators.
Iwuno, however, noted that certain aspects of the guidelines imposed charges, irrespective of whether investors made profits or incurred losses.
“We support the taxation of virtual assets without qualification. Our concern is with a design choice that taxes the movement of money itself,” he said.
Iwuno raised concerns over the 1.5 per cent stamp duty on conversions between naira and digital assets, as well as the one per cent withholding tax deducted from the gross value of cryptocurrency sales.
He also faulted provisions requiring taxes to be remitted in digital tokens instead of naira.
According to him, Section 39 of the Nigeria Tax Administration Act, 2025, stipulates that taxes should be paid in recognised currency.
He said virtual assets were not legal tender in Nigeria and should not be treated as such for tax purposes.
“The levy affects remittances to students abroad, freelancers converting earnings that have already been subjected to income tax, and traders who incurred losses during the year.
“Instead of taxing profits, it imposes a burden on participation,” he said.
Iwuno noted that young Nigerians, many of whom rely on digital assets for freelance earnings, savings and international payments, could be disproportionately affected by the framework.
“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,” he said.
Highlighting the coalition’s demands, Iwuno called on the Nigeria Revenue Service (NRS) to suspend implementation of the guidelines and commence consultations with industry stakeholders.
He urged the agency to replace taxes on gross transactions with taxes based on actual gains and introduce exemptions for students and low-income earners engaged in small-value transactions.
Iwuno also said that changes to tax rates should be approved by the National Assembly rather than introduced through administrative notices.
Speaking on global trends, he said countries that imposed transaction taxes on digital assets later reviewed or reversed such policies.
According to him, India’s one per cent withholding tax triggered a sharp decline in trading volumes on regulated exchanges, with a substantial share of transactions shifting offshore.
He added that Kenya repealed its three per cent transaction tax in 2025 after determining that the policy generated limited returns, while Turkey withdrew a similar proposal in 2026.
“The traders did not stop trading; they simply moved to platforms beyond the reach of regulators,” he said.
Iwuno noted that countries such as the United Kingdom, Brazil and South Africa taxed profits from virtual assets rather than the movement of funds.
He warned that Nigeria could encounter similar challenges if the framework remained unchanged.
“This is not a fight against taxation. It is a request for a design that works for citizens and the NRS alike,” Iwuno said.
The News Agency of Nigeria (NAN) reports that the Nigeria Revenue Service (NRS) on Aug. 3 released guidelines outlining the taxation of cryptocurrencies, stablecoins, non-fungible tokens and other virtual assets under the Nigeria Tax Act, 2025.
The NRS said that the framework applied to investors, traders, exchanges, wallet providers, miners, freelancers and businesses that accepted digital assets as payment.
It said that under the guidelines, profits from virtual asset sales are subject to income tax, while companies operating in the sector would pay 30 per cent company income tax on taxable profits.
The NRS noted that its regulations also imposed a one per cent withholding tax on the sale of cryptocurrencies, security tokens and non-fungible tokens, alongside a 1.5 per cent stamp duty on conversions between fiat currencies and digital assets.
It indicated that Value-Added Tax remained at 7.5% on services provided by crypto exchanges and other Virtual Asset Service Providers, but not on the digital assets themselves.
The NRS also clarified that simply holding cryptocurrency, transferring assets between personal wallets, minting NFTs, or receiving crypto-backed loans would not trigger tax.
However, it listed taxable activities as including selling crypto, swapping tokens, receiving salaries or consultancy fees in crypto, mining, staking, DeFi rewards, and NFT sales.
To calculate taxable gains, the NRS introduced a dollar-based method that taxes only the actual investment gain instead of gains caused by the depreciation of the naira.
It stipulated that taxpayers must also keep detailed records of their virtual asset transactions for at least six years.
The tax authority warned that non-compliant virtual asset service providers and peer-to-peer platforms could face sanctions, including fines of up to N10 million. (NAN)
A.I
Aug. 6, 2026
Tags: Mr Obinna Iwuno