Nigeria’s plan to tax crypto transactions could undermine adoption–operators

Nigeria has introduced stamp duty on certain crypto transactions and withholding taxes that industry players say could undermine ‌adoption of digital assets in one of the world’s most active retail crypto markets.

The tax authority released rules for cryptocurrencies, stablecoins, non-fungible tokens and other virtual assets this week and also introduced withholding taxes on transactions.

Nigeria is trying to boost government revenues. The country has reformed its tax system in a bid to modernise its public finances and capture more taxpayers including new sectors such as e-commerce and digital assets.
Under the new rules, crypto players could remit taxes in digital assets rather than ‌the naira currency .

Obinna Iwuno of Digital Assets Coalition, an industry body, said the new rule could drive away activity from regulated platforms and turn exchanges into tax agents.

“Tax the profit, not the movement of money,” Iwuno said. Nigeria is one of Africa’s largest cryptocurrency markets, with digital assets widely used for payments, savings and cross-border transfers despite years of regulatory uncertainty.

“The current design places the highest transaction tax burden … on one of the most mobile user bases in the world,” Iwuno added.