Nigerian Crypto Market at Risk from New Tax Rules

Nigeria's $92 billion virtual asset market is under threat from new tax rules that could drive businesses offshore, according to the Digital Assets Coalition. The coalition has expressed concern over the charges on the gross movement of money rather than profit earned.

The new guidelines, which came into effect on August 3, impose a 1.5% stamp duty on every conversion between naira and digital assets, regardless of whether a person gains or loses. A 1% withholding tax is also deducted from the entire value of every sale, even if the seller made a loss.

The coalition supports taxing virtual assets but objects to the design choice that taxes the movement of money itself. This, they argue, affects not only traders who make losses but also individuals who remit money abroad or convert earnings already taxed as income.