Nigeria’s crypto economy, long a vibrant but largely informal corner of its digital market, may soon become a significant source of government revenue under the newly enacted Nigeria Tax Administration Act (NTAA) 2025, analysts say.
According to PricewaterhouseCoopers (PwC), Nigeria processed an estimated $92.1 billion in cryptocurrency transactions between July 2024 and June 2025, making it the largest crypto market in Sub-Saharan Africa.
While this figure represents the aggregate value of transactions, rather than taxable profits, the new tax framework is designed to transform this dynamic into a measurable tax base for public coffers.
From Informal Activity to Taxable Economy
Historically, Nigeria’s crypto ecosystem operated outside formal tax systems, driven by youth adoption, inflation hedging and FX access challenges.
But the introduction of the NTAA 2025, effective January 1, 2026, changes that calculus.
Under the Act:
Cryptocurrency transactions must be linked to Tax Identification Numbers (TINs) and National Identification Numbers (NINs).
Virtual Asset Service Providers (VASPs), including exchanges, are mandated to collect and report user and transaction data to tax authorities.
Firms that fail to comply can face fines of ₦10 million in the first month and ₦1 million monthly thereafter, with potential licence revocation.
By requiring detailed reporting on crypto activities, from exchange trades to large transfers, the government now has the tools to quantify and tax what was previously an opaque economic segment.
Where Revenue Will Come From
The NTAA 2025 integrates virtual asset activity into Nigeria’s national tax declaration system, meaning income derived from crypto trading, gains and other digital asset operations will fall under existing income tax obligations.
That shift represents a marked departure from prior practice:
Before the tax act, crypto profits were subject to a 10% capital gains tax, but enforcement was limited due to tracing challenges.
The new regime embeds crypto into the income tax net, with progressive taxation similar to other earnings, offering a broader and more transparent revenue stream.
This change aligns with Nigeria’s broader fiscal goals. The government is seeking to raise the tax-to-GDP ratio from under 10% toward 18% by 2027, and crypto represents a new avenue for compliance and revenue that did not exist at scale before.
Industry Implications & Compliance Challenges
While the potential revenue upside is significant, the shift presents compliance challenges. VASPs will incur higher reporting and operational burdens, potentially increasing costs that could be passed on to users. Failure to comply carries heavy penalties under the NTAA.
Industry stakeholders also warn that stringent tax compliance could push some trading activity back into peer-to-peer channels, where enforcement and traceability are more difficult.
Nonetheless, the move represents a broader shift in how policymakers view the crypto economy: not as a fringe phenomenon, but as a measurable contributor to formal revenue systems and national economic strategy.
Looking Ahead: Revenue, Regulation and Growth
By formally integrating crypto into the tax system, Nigeria is seeking both enhanced revenue streams and greater oversight of digital finance flows.
For policymakers, the stakes are high: capturing even a small percentage of the $92.1 billion transaction value could yield substantial new tax income without depending on traditional sources like oil.
As the NTAA 2025’s provisions take effect in 2026, monitoring compliance, strengthening regulatory capacity, and ensuring that the tax regime does not inadvertently stifle innovation will be key to realising crypto’s revenue potential.
