Nigeria

Nigeria has one of the largest crypto user bases in Africa by volume, driven by naira inflation, dollar scarcity, and widespread adoption for remittances and cross-border payments. The regulatory and tax framework, however, has lagged this adoption significantly. A Central Bank of Nigeria (CBN) directive in 2021 prohibited Nigerian banks from facilitating crypto transactions — a ban that drove activity to peer-to-peer platforms and deepened the informal nature of the market. The ban was lifted in December 2023, and the Securities and Exchange Commission (SEC) has since moved to license Virtual Asset Service Providers. The Nigeria Tax Act 2025, signed into law in June 2025 and effective from 1 January 2026, repealed the Capital Gains Tax Act's flat 10% rate on digital asset disposals and replaced it with progressive Personal Income Tax (PIT) rates — administered by the Federal Inland Revenue Service (FIRS) — folded into the standard income tax regime.

Core Tax Treatment

Gains from the disposal of cryptocurrency are no longer subject to a separate Capital Gains Tax. Since 1 January 2026, the Nigeria Tax Act 2025 requires disposal gains to be added to the individual's total assessable income and taxed at progressive rates of 0%, 15%, 18%, 21%, and 25% depending on total annual income, replacing the previous flat 10% CGT rate entirely. The gain is calculated as disposal proceeds minus the allowable cost of acquisition and any related expenses, in Nigerian Naira. Crypto-to-crypto swaps are in principle taxable disposal events under the same framework, though practical enforcement remains limited given the dominance of P2P and informal trading channels.

A small-disposal exemption shelters modest investors: where total disposal proceeds in the tax year are below ₦150 million and the resulting gain is below ₦10 million, the disposal is exempt from tax entirely. Both conditions must be met — a large-proceeds, small-gain disposal (or vice versa) does not automatically qualify. Nigeria's enforcement capacity remains limited in practice, which does not remove the legal obligation to declare and pay tax on gains that fall outside the exemption.

PIT on Crypto Disposals and the Small-Disposal Exemption

The shift from a flat 10% CGT to progressive PIT materially changes the tax burden calculus. Under the old regime, every disposal — large or small — was taxed at the same 10% rate. Under the new regime, a taxpayer whose total income (including the crypto gain) falls within a lower PIT band may face a 0% or 15% effective rate on the gain, while a high-income taxpayer realising a large gain can face a marginal rate of up to 25% — well above the old flat rate. The small-disposal exemption (proceeds under ₦150 million and gain under ₦10 million) is the main relief available to smaller investors and operates independently of the PIT bands.

Because the gain is folded into ordinary income rather than taxed separately, the exact liability on any given disposal depends on the taxpayer's total annual income and where the gain falls within Nigeria's PIT bands. Taxpayers with other significant income sources should expect crypto gains to be taxed at or near their marginal PIT rate rather than at a flat figure.

The Banking Ban and Its Legacy

The CBN's 2021 prohibition on bank-facilitated crypto transactions pushed the Nigerian crypto market heavily toward peer-to-peer platforms, particularly Binance P2P and Paxful. This shift created a market structure in which most transactions left limited formal records accessible to FIRS. The ban's reversal in December 2023 began the process of re-integrating crypto into the formal financial system, but the P2P infrastructure developed during the ban period remains dominant. For tax documentation purposes, users who traded exclusively on P2P platforms during 2021–2023 may have limited transaction records accessible through formal channels.

P2P Trading and Tax Documentation

P2P trades generate transaction records on the platform facilitating the match, but these are not automatically reported to FIRS. Individuals who have conducted significant P2P volume should retain their own records of acquisition costs, disposal proceeds, and dates — these are the basis for any future income tax calculation and the defence against any FIRS assessment. As formal exchange activity grows following the banking ban reversal, transaction visibility will increase.

Mining and Staking

Nigeria has not published specific guidance on the tax treatment of mining or staking income. Under general FIRS principles, income received in any form — including cryptocurrency from mining or staking — would be subject to Personal Income Tax at the applicable progressive rate for the individual's income level. The absence of explicit guidance creates uncertainty, but the absence of guidance is not the same as a tax exemption. FIRS has stated it is developing more comprehensive crypto guidance.

VASP Licensing

The SEC's VASP licensing framework, developed following the banking ban reversal, requires crypto exchanges and service providers operating in Nigeria to register and comply with AML/KYC standards. Licensed VASPs include Quidax, BuyCoins, and several others. The licensing framework represents a significant step toward formalisation of the Nigerian crypto market and is expected to form the foundation for CARF reporting obligations when Nigeria implements the framework as part of its 2028 wave.

Reporting

Taxable crypto gains are declared in the annual FIRS return. The reporting infrastructure for crypto-specific transactions is limited, and most individuals do not currently report crypto gains. As the SEC licensing framework matures and CARF approaches, the expectation is that formal reporting obligations will become more clearly articulated. Individuals with material crypto gains should document their positions and be prepared to comply as the framework develops.