Nigeria's virtual asset tax guidelines face scrutiny by PwC

PricewaterhouseCoopers (PwC) has released an analysis of the Nigeria Revenue Service (NRS) guidelines regarding the taxation of virtual assets, highlighting potential penalties and regulatory ambiguities.

Under the new framework, taxpayers and merchants facing non-compliance could encounter significant sanctions. Penalties for the first month of default are set at N10 million, with N1 million for each subsequent month. Failure to deduct tax at source may result in a penalty of 40 per cent of the required amount, while failure to remit deducted tax could trigger a 10 per cent annual charge plus interest based on the Central Bank of Nigeria’s Monetary Policy Rate.

PwC identified several practical concerns, including the lack of a safe harbour for transfers between wallets owned by companies or partnerships, a provision currently only available to individuals. Additionally, the firm noted uncertainty regarding the requirement to use an approved price aggregator, as the official list of approved aggregators has not yet been published.

Taxable activities include income from mining, staking, decentralised finance (DeFi) rewards, airdrops, and professional fees. For companies, a 30 per cent tax rate applies to taxable gains from the disposal of virtual assets.