Nigerian Cryptocurrency Traders Fear Tax Burden Will Drive Activity Underground

Nigeria's new virtual asset tax framework has been met with criticism from peer-to-peer (P2P) cryptocurrency traders and over-the-counter (OTC) dealers. The framework, which was signed on July 31 and announced by the Nigeria Revenue Service (NRS) on August 3, introduces a 1.5% stamp duty charge on digital assets.

Joshua Adedeji, a Nigerian OTC bulk trader, said that the tax cost is far higher than his existing operating costs. He processes about $500,000 worth of USDT, a dollar-backed stablecoin, weekly on cryptocurrency exchange Bybit and expects trading volumes to fall sharply if the tax rules are enforced strictly.

The compliance burden will weigh heavily on crypto traders who rely on very small price differences to make money. Frequent stamp duty deductions increase the cost of moving money between wallets, exchanges, and customers, cutting into already thin margins for day traders and swing traders.