Nigeria's new virtual asset tax rules face legal and enforcement challenges

PwC Nigeria has issued a tax alert analyzing the Nigeria Revenue Service (NRS) new guidelines for taxing virtual assets. While the framework represents the country’s first comprehensive administrative structure for digital assets, PwC warned of legal uncertainties, enforcement gaps, and a heavy compliance burden for Virtual Asset Service Providers (VASPs).

The guidelines categorize virtual assets into six groups: cryptocurrencies and exchange tokens, stablecoins and payment tokens, security and investment tokens, utility and governance tokens (including DeFi and staking rewards), non-fungible tokens (NFTs), and sovereign digital currencies like the eNaira.

Tax liabilities vary by category and transaction type. For example, income tax applies to individuals at progressive rates and to companies at 30 per cent on gains from disposal. The framework also introduces a 1 per cent withholding tax on gross disposal proceeds for certain tokens, a 10 per cent withholding tax on passive income from staking or DeFi, and a 7.5 per cent VAT on taxable supplies such as exchange fees and brokerage commissions. PwC noted that the guidelines lack an effective date despite introducing obligations not currently found in the Nigeria Tax Act or Nigeria Tax Administration Act.