16/04/2025
Cryptocurrency Transactions and Tax
Implications in Nigeria Cryptocurrency (also called "crypto assets") is a kind of digital money that people can trade online. It can be used to buy things, save money, or keep track of value—but it’s not considered legal money by any government.
The Nigerian tax authorities (FIRS) say certain crypto activities can lead to taxes:
· Selling Crypto for Cash
If you sell crypto (like Bitcoin) for Naira and make a profit, that profit is taxed.
· Trading One Crypto for Another
Swapping one crypto for another (like Bitcoin to Ethereum) is also taxed if you gain value.
· Spending Crypto
Using crypto to buy things (like pizza) is taxed because it's like selling crypto.
· Getting Paid in Crypto
If someone pays you in crypto for your work or services, you have to pay tax on that income.
· Earning from Mining or Staking
If you earn crypto from mining, staking, or running masternodes, it's also taxable income. You might be able to deduct costs (like buying mining equipment) if used for business.
· Free Crypto (Airdrops and Forks)
If you get free crypto (like through airdrops or from a new coin created during a blockchain split), it could also be taxed.
These are the type of taxes that apply:
· Capital Gains Tax (10%)
If you make profit from selling crypto, you pay 10% tax on the gain.
· Income Tax
If you earn crypto from work or rewards, you pay regular income tax based on the crypto’s value when you receive it.
· VAT (7.5%)
In 2024, Nigeria started charging 7.5% VAT on crypto transaction fees KuCoin actually implemented this in July 2024.
By June 2025, crypto exchanges and service providers in Nigeria will be regulated by the SEC.
Cryptocurrencies are now treated as securities, like stocks.
I will advise you keep track of all your crypto trades and earnings, follow updates from FIRS and SEC, talk to a tax expert if you're unsure to stay out of trouble.
This summary is based on an article by Jacob Dipo Famodimu LLM,ABR,GCTI,ACTI, and Notary Public published on LawPavilion
