NIGERIA’s $92 billion virtual asset market, built overwhelmingly by young Nigerians and now the largest in Sub-Saharan Africa, risks being driven offshore by the new Guidelines on the Taxation of Virtual Assets, the Digital Assets Coalition warned, Thursday as it published its formal position paper on the framework, which came into force on August 3, 2026.

The Coalition, the industry alliance representing digital-asset participants and operators in Nigeria, opens the paper, titled: “Tax the Profit, Not the Movement of Money”, with an unambiguous statement of support for taxation. 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.

The Coalition objects to the charges on the gross movement of money rather than on any profit earned. The first is a 1.5 per cent 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 per cent 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.

Spokesperson of the Digital Assets Coalition, Obinna Iwuno, said: “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.”

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 thresholds 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,” Iwuno said. “You cannot tax your way into the future by taxing the people building it.”

Every comparable country has reversed course. India’s one per cent transaction withholding saw regulated exchanges lose 81 per cent of volume within four months, with over 90 per cent of trading moving offshore within a year, according to the Esya Centre. Kenya repealed its three per cent 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 with a de minimis exemption, 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,” Iwuno added. “The Coalition stands ready to help make a workable framework succeed.”