Nigeria’s new tax framework for virtual assets could significantly reshape the country’s digital-asset market by imposing new collection, reporting and compliance obligations on virtual asset service providers (VASPs), according to PwC Nigeria.

The professional services firm, in its latest tax alert titled “Taxing the Intangible: A Critical Analysis of the NRS Guidelines on Taxation of Virtual Assets,” said the Nigeria Revenue Service (NRS) published Information Circular No. 2026/21, Guidelines on the Taxation of Virtual Assets, on July 31, 2026.

The guidelines represent the first comprehensive administrative framework for taxing virtual assets in Nigeria, coming as digital-asset activity becomes an increasingly significant component of the economy.

PwC said the guidelines mark a further shift in Nigeria’s regulatory approach from restrictions towards formalisation of the virtual-asset industry.

However, it noted that the guidelines do not specify an effective date, despite introducing obligations that are not expressly contained in the Nigeria Tax Act (NTA) or Nigeria Tax Administration Act (NTAA).

Multiple taxes on virtual assets

Under the framework, virtual assets are divided into six categories, including cryptocurrencies such as Bitcoin, Ether and Solana; stablecoins and payment tokens; security and investment tokens; utility and governance tokens; non-fungible tokens (NFTs); and sovereign digital currencies.

The eNaira and foreign central bank digital currencies are excluded from the virtual-asset tax framework and are treated in the same manner as fiat currencies.

PwC said a single virtual-asset transaction could trigger multiple tax liabilities depending on the nature of the transaction and the applicable taxable event.

Income tax applies to gains from disposal as well as income or gifts received in virtual assets, including employment income, professional fees, mining rewards, staking rewards, decentralised finance (DeFi) rewards and airdrops.

Companies other than small companies are subject to a 30 per cent income tax rate on applicable gains, while individuals are taxed at progressive rates.

The guidelines also introduce a one per cent withholding tax on gross disposal proceeds for cryptocurrencies, security and investment tokens, and NFTs, with VASPs responsible for collecting the levy.

Passive income from staking, mining, airdrops and DeFi yields attracts 10 per cent withholding tax, while professional fees are subject to withholding tax at five or 10 per cent, depending on the applicable category.

VAT, stamp duty obligations

The framework further applies Value Added Tax at 7.5 per cent to taxable services associated with virtual-asset transactions, including exchange fees, brokerage commissions, custody and advisory services.

However, the transfer of ownership of a virtual asset does not, by itself, constitute a taxable supply for VAT purposes.

Stamp duty is also imposed at 1.5 per cent on token-to-fiat and fiat-to-token transfers, with the transferee bearing the cost.

VASPs are required to deduct the duty in token units from tokens credited and remit the amount to the NRS twice monthly, by the 15th and 30th.

PwC, however, flagged potential implications of the stamp-duty provision, noting that the NRS position could imply a broader 1.5 per cent stamp-duty exposure for transfers of goods and intangible property.

It added that transactions of N10 million or less should, based on the law, be exempt from stamp duty, and urged the NRS and VASPs to consider the issue when configuring their systems.

Dollar-based computation to limit ‘phantom’ gains

One of the most significant provisions, according to PwC, is the dollar-referenced method for calculating taxable gains.

Under the approach, the gain is determined using the US dollar value of a virtual asset at acquisition and disposal. The resulting dollar gain is then converted into naira using the CBN/NAFEM rate applicable on the disposal date.

PwC described the methodology as a pragmatic policy choice because it excludes naira depreciation from the taxable gain and prevents taxpayers from being taxed on currency-driven “phantom gains.”

The guidelines also restrict losses from virtual-asset disposals to set-off against other virtual-asset gains. Capital losses can be carried forward indefinitely, but only against future virtual-asset gains.

The First-In, First-Out (FIFO) method is the default cost-base methodology, although taxpayers may elect to use Weighted Average Cost, provided it is applied consistently from commencement.

VASPs become tax collectors

The new framework places substantial responsibility on virtual asset service providers, effectively turning them into tax collection agents for the NRS.

VASPs must deduct withholding tax, collect stamp duty, enforce Tax Identification Number requirements before account activation, maintain records and file comprehensive returns, in addition to charging and remitting VAT on their own service fees.

The financial consequences of non-compliance are substantial.

A VASP or peer-to-peer marketplace that fails to comply could face a N10 million penalty for the first month of default and N1 million for every subsequent month.

Failure to deduct tax attracts a penalty equivalent to 40 per cent of the amount that should have been deducted, while failure to remit deducted taxes attracts 10 per cent annual interest plus the applicable CBN Monetary Policy Rate interest.

Enforcement gap in P2P market

PwC warned that enforcement could prove difficult in Nigeria’s sizeable informal peer-to-peer market.

While VASP-operated P2P platforms face collection obligations, genuine off-platform transactions conducted directly between wallets, through messaging applications or in person would largely depend on taxpayers declaring the transactions through annual self-assessment.

“This represents a clear enforcement gap that the NRS will need to address,” PwC said.

The firm also identified uncertainties surrounding corporate wallet transfers, the yet-to-be-published list of approved price aggregators, and the interaction between withholding tax on gross proceeds and income tax on net gains.

Taxpayers urged to prepare

PwC advised individuals and businesses engaged in virtual-asset activities to urgently register for tax and obtain Tax IDs, warning that Nigerian VASPs could stop processing transactions for users who fail to meet the requirements.

It also urged VASPs to review their systems immediately to ensure they can calculate, withhold and remit taxes in the originating tokens as required under the guidelines.

Taxpayers were further advised to adopt either FIFO or Weighted Average Cost from the outset, as retrospective changes to the cost-base methodology are not permitted.

Record-keeping for at least six years is mandatory.

PwC said that despite unresolved implementation challenges, the new guidelines provide a workable baseline for compliance, while leaving several legal and operational questions for the NRS and industry participants to resolve.