Nigeria's Crypto Tax Regime Sparks Backlash Over Transaction Taxes

Nigeria's new cryptocurrency tax regime has sparked controversy among digital asset industry players. The Nigeria Revenue Service (NRS) released guidelines on the taxation of virtual assets, which cover cryptocurrencies, stablecoins, NFTs, staking, mining, and DeFi activities.

The rules impose a 1% withholding tax on gross proceeds for certain crypto disposals, as well as a 1.5% stamp duty on specified naira-to-crypto and crypto-to-naira conversions. Staking, mining, DeFi income, and taxable airdrops attract a 10% withholding tax.

Industry groups argue that taxation should focus on profits rather than the movement of funds. Stakeholders warn that excessive taxation could drive users towards peer-to-peer (P2P) and offshore platforms.