Nigeria Tightens Crypto Tax Rules in 2025, 10% CGT on Profits

Nigeria has emerged as a significant hub for cryptocurrency, with many residents embracing digital coins like Bitcoin and Ethereum for their convenience and speed, especially in an economy that can be unpredictable. Understanding the tax implications of cryptocurrency is crucial for avoiding legal issues. The Federal Inland Revenue Service (FIRS) oversees crypto taxation, ensuring compliance as regulations become stricter in 2025.

In Nigeria, two key authorities regulate the cryptocurrency market: the FIRS, which handles crypto taxes, and the Securities and Exchange Commission (SEC), which enforces market rules. The Finance Act 2023 brought cryptocurrency under the tax umbrella, and the SEC is set to implement stricter regulations for exchanges in 2025. For Nigerians, cryptocurrency is considered "property" or "digital assets," meaning taxes apply whenever profits or earnings are realized from these assets.

Crypto taxes in Nigeria vary based on usage. Capital Gains Tax (CGT) applies when someone sells crypto for a profit, such as exchanging Bitcoin for naira. Income tax is levied on earnings from mining, staking, airdrops, or jobs paid in crypto, similar to regular income. Since 2024, a 7.5% Value-Added Tax (VAT) applies to fees charged by crypto platforms, but not the crypto itself. Currently, there are no wealth or inheritance taxes on crypto, but this could change in the future.

Tax rates and brackets in Nigeria are as follows: Capital Gains Tax is a flat 10% on profits from selling crypto, whether by an individual or a business. Income tax on crypto earnings follows Nigeria’s regular rates, ranging from 7% for those earning up to ₦300,000 to 24% for those earning over ₦3.2 million, and 30% for companies. There is a ₦10,000 CGT exemption, and losses can sometimes reduce the tax bill.

Different crypto activities have different tax implications. Buying crypto with naira does not trigger taxes, but selling it for a profit incurs a 10% CGT. Mining or staking crypto is considered income and is taxed based on its value when received. Payments in crypto for work or goods are taxed like regular income in naira. Swapping one crypto for another (e.g., Bitcoin for Ethereum) results in CGT if there is a profit. Decentralized Finance (DeFi) activities like lending or yield farming see earnings taxed as income. Selling Non-Fungible Tokens (NFTs) leads to CGT if money is made, with no special exceptions yet.

Crypto tax reporting and compliance require individuals and businesses to report their crypto earnings to the FIRS through the TaxPro-Max online system. Individuals follow personal income tax rules, while businesses adhere to company tax laws. They must track every transaction, including dates, amounts, and naira values, using wallet or exchange records. Deadlines are March 31 for individuals and June 30 for companies. Missing these deadlines risks fines starting at ₦10,000 or 5% of unpaid tax, plus additional fees.

There are ways to lower crypto tax costs. Losses from trades can reduce gains and lower CGT, but they must be reported in the same year. Businesses can deduct expenses like mining equipment or fees. Everyone gets a ₦10,000 CGT exemption. Proper records are essential for claiming these deductions without issues.

The FIRS is intensifying enforcement efforts in 2025, using blockchain tools and data exchange to identify tax evaders. Know Your Customer (KYC) rules on platforms help track users, though peer-to-peer (P2P) trading remains challenging to monitor. Non-compliance can result in fines starting at ₦10,000, which grow with interest. Serious offenders may face court action or jail time. The 2024 Binance clash highlighted the severity of enforcement actions.

Crypto taxation in Nigeria is evolving. A potential 2025 law could introduce a 0.5–1% CGT on all profits and expand VAT, aiming to increase government revenue. Leaders aim for fair taxation without deterring crypto users. Looking ahead, benefits like tax breaks for startups could emerge if Nigeria further embraces its digital goals.

In summary, crypto taxes in Nigeria include a 10% CGT on profits, income tax on earnings, and a 7.5% VAT on platform fees, all managed by the FIRS and SEC. Maintaining accurate records and filing on time is essential to avoid penalties. As regulations tighten in 2025, consulting a tax expert can help individuals navigate crypto taxation wisely and safely.