Nigeria’s USD 92 B Crypto Market Stung By New Tax Rules That Operators Call Suffocating
Nigeria’s multi-billion-dollar virtual asset market, the largest in Sub-Saharan Africa, risks being suffocated and driven offshore by new tax guidelines that charge levies on transactions regardless of whether users make a profit, an industry coalition has warned.
The Digital Assets Coalition (DAC), representing digital asset operators and stakeholders in Nigeria, is urging the Nigeria Revenue Service to review the framework that took effect on August 3, taking a formal position that fears the new rules are an albatross to the sector.
The coalition’s concerns centre on three provisions. First, a 1.5% stamp duty on every conversion between naira and digital assets, never refunded and charged whether a person gains or loses. Second, a 1% withholding tax deducted from the total value of every digital asset sale, even where investors incur losses. Third, a requirement to remit taxes in digital tokens rather than naira, which the coalition says conflicts with Section 39 of the Nigeria Tax Administration Act, 2025, mandating tax payments in recognised currency.
“We support the taxation of virtual assets without qualification,” said Obinna Iwuno, spokesperson of the Digital Assets Coalition. “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 young Nigerians, who built the USD 92 B market into working infrastructure for global earnings, family remittances and savings that survive naira volatility. Because young users transact small amounts frequently, the levies compound fastest against their pattern of use, biting even below the NGN 10 M threshold the Nigeria Tax Act itself exempts and within the NGN 800 K income band taxed at zero.
“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.”
The coalition points to international precedent. India’s 1% transaction withholding tax saw regulated exchanges lose 81% of trading volume within four months, with over 90% of trading moving offshore within a year, according to the Esya Centre. Kenya repealed its 3% transaction tax in 2025 after determining it generated limited returns, and Turkey withdrew a similar levy in 2026.
“The traders did not stop trading; they simply moved to platforms beyond the reach of regulators,” Iwuno said.
Nigeria formally legalised digital assets in March 2025 when President Bola Tinubu signed the Investments and Securities Act into law. The country processed USD 92.1 B in cryptocurrency transactions between July 2024 and June 2025, nearly three times that of South Africa, according to PwC. Despite regulatory uncertainty, Nigeria has become one of the world’s most active retail crypto markets.
The coalition maintains it is not opposed to taxation. It backs taxing realised gains, registering platforms, verifying customers and requiring full transaction reporting, in line with standards in the United Kingdom, South Africa and Brazil. But it warns that taxing transaction volumes rather than profits will shrink economic participation and ultimately reduce government revenue.
“This is not a fight against taxation. It is a request for a design that works for citizens and the Revenue Service alike,” Iwuno said.
The coalition has called on the NRS to suspend implementation, consult publicly, tax real gains rather than movement, collect taxes in naira, protect small earners with a de minimis exemption, and ensure tax rates are set only by the National Assembly.
