Nigeria Passes Tax Law to Enable Traceability of Cryptocurrency Transactions and Tax Declaration

The Nigerian government has enacted the Nigeria Tax Administration Act (NTAA) 2025, which mandates the traceability of cryptocurrency transactions. The law became effective on January 1, 2026, and aims to incorporate digital asset earnings into the national tax declaration system. This development aligns with international standards such as the OECD's Crypto-Asset Reporting Framework (CARF) according to reports. The new law ties crypto transactions to individual taxpayers using their Tax Identification Number (TIN) and National Identification Number (NIN) as stated.

Under the NTAA 2025, Virtual Asset Service Providers (VASPs), including crypto exchanges, are required to report monthly details of customer and transaction data to tax authorities. Reports must include user names, addresses, phone numbers, email addresses, TINs, NINs, and transaction dates. The law also mandates the reporting of any suspicious or large transactions to the Nigerian Financial Intelligence Unit (NFIU)

as required.

The government has imposed strict penalties for non-compliance. VASPs that fail to comply could face fines of ₦10 million for the first month and ₦1 million for subsequent months, with the risk of license revocation according to the law. These measures aim to prevent money laundering and ensure tax compliance.

Why Did This Happen?

The NTAA 2025 was introduced to address growing volumes of crypto transactions in Nigeria. Between June 2024 and June 2025, the country recorded $92.1 billion in crypto-related transactions. The government previously attempted to tax crypto profits in 2022 but failed due to the inability to trace transactions to individuals as noted. The new law aims to resolve this issue by linking digital asset activity to taxpayer records using NIN and TIN according to sources.

The law also aligns with the Investment and Securities Act (ISA) 2025, which recognizes cryptocurrencies as securities. This regulatory shift allows the Securities and Exchange Commission (SEC) to monitor VASPs, Digital Asset Operators (DAOs), and Digital Asset Exchanges (DAXs) as reported.

What Are Analysts Watching Next?

Analysts are observing how the law affects compliance among VASPs and user behavior. The requirement to retain KYC records and transaction data for seven years could pose challenges for smaller exchanges according to analysis. Larger platforms may also face increased operational costs due to the need for enhanced reporting and compliance systems as observed.

The law's impact on user adoption is another area of interest. Stricter KYC and reporting rules may deter some retail users, especially in areas with limited digital access according to reports. However, the move toward greater transparency could attract institutional investors and align Nigeria with international crypto tax frameworks.

The government has encouraged citizens to obtain their TINs through the Nigeria Revenue Service (NRS) and the Joint Revenue Board (JRB) as stated. This initiative aims to ensure that all taxable crypto activities are properly documented and reported to tax authorities.

What About Global Context?

Nigeria's approach mirrors efforts by other countries to regulate the crypto space. For example, India has also tightened crypto regulations, mandating strict KYC requirements and restricting the use of privacy tools according to crypto news. These global trends reflect a growing consensus that cryptocurrency needs to be brought under the same regulatory framework as traditional financial assets.

The OECD's CARF, which became effective on January 1, 2026, provides a model for the Nigerian law. CARF requires tax authorities to access information on crypto trades, both domestic and international as detailed. By adopting a similar framework, Nigeria is positioning itself to comply with international financial reporting standards and improve its transparency ratings.

Nigeria's previous crypto restrictions, including a 2024 ban on digital assets and the detention of Binance employees, contrast with the current focus on regulation and compliance as reported. This shift indicates a strategic pivot toward managing the sector rather than suppressing it. The success of the NTAA 2025 could serve as a model for other African nations looking to integrate crypto into their financial systems.

The effectiveness of the law will depend on enforcement and user compliance. If VASPs and individuals adhere to the requirements, the government may see a significant increase in tax revenue from digital assets. However, if the law faces resistance or workarounds, its impact may be limited according to analysis.

For investors, the new law introduces additional compliance requirements but also reduces regulatory uncertainty. A more transparent and traceable market could lead to increased institutional participation and investor confidence. However, the initial phase of implementation may involve some volatility as platforms adjust to the new reporting obligations as noted.