TL;DR,

• Nigeria’s new crypto tax laws under the NTAA define virtual assets, tax profits, staking, airdrops, services, and require VASPs to comply before 2026.
• The regulations clarify taxation points across trading, payments, and licensing, while introducing penalties, Howey Test rules, and updated compliance obligations.
• All VASPs must obtain proper licensing, implement KYC/AML systems, and maintain detailed transaction records before January 2026 or face penalties up to ₦10 million.

Nigeria has taken its regulation to the next step, introducing crypto tax laws through the Nigeria Tax Administration Act 2025(NTAA). The region, a constant reference point from Chainalysis for its high transaction rate, intends to foster growth while also benefiting.

25 million users with an annual digital asset activity exceeding $500 million is a gold mine for economic growth. Within a year, Nigeria has gone from cutting down its crypto adoption to urging builders, developing crypto licenses, endorsing its stablecoins and now crypto tax laws that target retail and institutional users.

The New Crypto Tax Laws Reality: The NTAA 2025

The Nigeria Tax Administration Act is the first step towards a comprehensive legal definition of virtual assets in Nigeria. Section 79 and the Fifth Schedule of the NTAA define virtual assets as;

“Digital representations of value that can be digitally traded or transferred and used for payment, investment, or other financial purposes.”

This encompasses cryptocurrencies, tokens and digital collectibles. Furthermore, to avoid any future intersections, the new law excludes:

• National and foreign currencies
• Electronic money licensed by the Central Bank of Nigeria
• Loyalty and reward systems
• Digital representations of regulated assets under the Investment and Securities Act (ISA)

The NTAA explicitly empowers the President to designate a federal agency responsible for regulating virtual assets. This generally retains the powers Nigeria’s SEC has over securities classified under its recent ISA Act 2025.

Clear guidelines on how different activities will be taxed:

• Trading profits on cryptocurrencies such as Bitcoin, Ethereum and NFTs will attract 10% Capital Gains Tax on net gains.
• Mining and staking rewards will be treated as income taxed progressively between 7-24% under Personal Income Tax (PIT).
• Salaries and freelance payments in crypto will fall under the PIT for individuals (7-24%), and Corporate Income Tax (CIT) for businesses (20-30%). At the same time, employees will be subject to Pay-As-You-Earn tax where applicable.
• Crypto payments for goods and services will fall under Naira transactions, attracting 7.5% VAT plus applicable income tax.
• Airdrops and bounties will also be taxed as income at PIT rates(7%-24%) based on value when received.
• Crypto-related services such as consulting or payments are subject to 5-10% Withholding Tax.

The new laws encompass the various key application points of cryptocurrency. It acknowledges the inputs of cryptocurrency from trading activities, freelancers or gig workers relying on stablecoin, airdrops and bounties earned by developers and crypto payments as a common factor, especially with local startups cropping up like Busha, Yellow Card and others.

RELATED: Inside ISA 2024: How Nigeria Is Legalizing Crypto and Cracking Down on Ponzi Scheme Laws

VASP Licensing Requirements and Compliance

From the ISA 2025 Bill, Nigeria has a clear definition of Virtual Asset Service Provides ranging from cryptocurrency exchanges, peer-to-peer platforms, DeFi brokers and over-the-counter desks. The minimum paid-up capital for such entities rose from $334,669(₦500 million) to $669,339(₦1 billion).

Alongside the ISA 2025, the NTAA mandates that these entities must register for tax purposes and obtain VASP licensing before continuing operation in Nigeria. Persons undertaking such activities must also register with the relevant tax authority. Failure to comply will result in administrative penalties of $6,676.06(₦10 million) for the first month of default and $668.21(₦1 million ). Persistent violation will result in license suspension or revocation, and for the “smart” businesses evading tax, three three-year improvements await.

source: TVC-News

While the SEC has taken a lead role in VASP licensing through its 2022 Rules on Digital Assets Issuance and Accelerated Regulatory Incubation Program (ARIP), the NTAA adds the fine lining many exchanges have asked: where will taxation be implemented? Figuring out where to apply tax regulation throughout crypto transfer has eluded many regulators.

A prime example is Kenya’s Digital Asset Tax (DAT), introduced by the Finance Act of 2023 and found in Section 12F of the Income Tax Act (ITA). The vague application of its VAT rates prompted many to question the interplay between exchanges and regulators.

As of September 2025, the new regulations add another layer of compliance, requiring VASPs to:

• Implement robust KYC/AML systems
• Maintain detailed transaction records
• Remit appropriate taxes
• Submit regular reports to regulatory authorities

The Howey Test: Determining Securities Status

What really makes the Nigeria Tax Administration Act truly outpace Kenya’s and South Africa’s is the application of the Howey Test, a four-part legal standard established the the US Supremecourt determining whether transactions qualify as an “invesment contract” or commonly known as securities.

Paragraph 2 of the Fifth Schedule has mimicked this framework as:

• An investment of money or other assets
• Investment in a common enterprise
• Expectation of profits from the investment
• Profit arising from the efforts of a promoter or third-party

The Howey test creates a clear-cut line between different types of digital assets. For instance, given Nigeria’s reliance on dollar-begotten stablecoins, such payments fail the third and fourth criteria since they do not generate profit expectation through a promoter’s efforts. Such a token will not fall under the NTAA jurisdiction.

Conversely, yield-bearing tokens or algorithmic stablecoins that rely on protocol management or are linked to a treasury would likely qualify as securities.

Preparing for January 2026 to Avoiding the 1 Million Fine

Digital asset licensing in Nigeria is now a necessity, with the region leading Africa’s crypto frontier. The full effects of the new crypto tax laws are set for January 2026, giving enough time for startups and renowned DeFi entities enough time.

Here is a brief cheat sheet to get you started on how to gain the SEC green card to Nigeria’s $500 million crypto ecosystem:

• Assess which assets qualify as securities under the Howey test, which involves understanding Investment-like assets (securities tokens, yield-bearing products), Payment-like assets (stablecoins pegged to fiat) and Hybrid assets.
• Document transaction histories and customer data for accurate tax reporting, avoiding the infamous “crypto scams”
• Update KYC/AML procedures to meet enhanced requirements.
• Implement accounting systems capable of tracking crypto transactions and tax obligations.

This time round, Nigeria is serious, for any exchange or crypto-related business regulation is mandatory.

RELATED: Nigeria’s Crypto Boom: IMF Warns of FX Risks & Urges Tighter Regulation