Nigeria Adopts Tax-Based Crypto Oversight Framework

Nigeria has begun enforcing a new framework for cryptocurrency oversight under the Nigeria Tax Administration Act (NTAA) 2025. This system links virtual asset transactions to individual taxpayer identities using Tax Identification Numbers (TIN) and National Identification Numbers (NIN). The initiative aims to bring digital asset activity into the formal tax system and improve enforcement against tax evasion.

The framework aligns with the OECD's Crypto-Asset Reporting Framework (CARF), which became effective on January 1, 2026. This global standard enables cross-border information exchange, allowing tax authorities to track digital asset transactions more effectively.

Under the new law, Virtual Asset Service Providers (VASPs) must collect and submit detailed customer data, including names, addresses, TINs, and NINs. These providers are required to report all transactions to the Nigeria Revenue Service and the Securities and Exchange Commission.

Why Did Nigeria Implement This Framework?

The Nigerian government faces a low tax-to-GDP ratio and seeks to expand its tax base through digital asset activity. Between July 2024 and June 2025, Nigeria processed over $92.1 billion in digital asset transactions. Authorities aim to capture a portion of this activity through formal tax channels, increasing revenue without imposing higher tax rates.

The move also reflects a broader international trend toward identity-based crypto reporting. Nigeria's implementation of the NTAA is part of a global shift, with over 70 jurisdictions participating in the CARF framework. This alignment ensures that Nigeria can participate in cross-border data sharing, improving transparency in crypto markets.

What Are the Implications for Crypto Users and Service Providers?

For users, the new system means that crypto exchanges may request additional personal and tax information. This includes full names, addresses, TINs, and NINs. Previously, the anonymity of digital asset transactions made enforcement difficult, but the new framework allows tax authorities to trace these transactions back to individuals.

VASPs must also flag large or suspicious transactions and submit monthly reports to tax authorities. Failure to comply may result in fines starting at ₦10 million, with additional penalties for continued non-compliance. The Securities and Exchange Commission also has the authority to suspend or revoke licenses for repeated violations.

What Are Analysts Watching Next?

Analysts are monitoring how the new framework impacts user behavior and market confidence. While the system reduces anonymity, it may also enhance investor trust by increasing transparency. The government aims to raise its tax-to-GDP ratio to 18% by 2027, and the success of this initiative will be a key factor in achieving that goal.

The long-term effects on the Nigerian crypto market remain to be seen. The framework's ability to close enforcement gaps and prevent tax evasion will be critical to its success. Additionally, the integration of Nigeria into the global CARF network could influence other emerging markets in their regulatory approaches.