Crypto now taxable but reporting gap raises compliance risk.

 

Crypto now taxable but reporting gap raises compliance risk.

Nigeria’s tax authorities have brought cryptocurrency gains within the formal tax net, but the absence of sector-specific guidance on how such gains should be computed and reported is creating compliance uncertainty for investors and fintech operators.

The reforms extend capital gains tax and Value-Added Tax (VAT) obligations to digital transactions and virtual asset service providers operating in Nigeria, placing cryptocurrency activity within the compliance perimeter.

Unlike equities traded through licensed brokers, crypto transactions often occur across multiple exchanges and private wallets, many outside Nigeria’s reporting infrastructure. There is no central mechanism that automatically transmits individual trading data to tax authorities, leaving investors to calculate and self-report gains and losses.

Ayodele Subair, chairman of the Lagos State Internal Revenue Service (LIRS), said fintech and cryptocurrency companies are clearly within the scope of the new regime.

“For fintechs operating in Lagos, the reforms bring clarity rather than uncertainty. They define expectations around VAT on digital and remote supplies and establish registration and reporting obligations for all virtual asset service providers,” he said, speaking at ‘Fintech in Nigeria 2026: navigating the new tax regime’.

Tax advisers say digital assets fall within the capital gains framework. Tunde Lemo, chairman of Titan Trust Bank, noted that the revised tax rate on chargeable gains has been set at 10 percent for companies, alongside changes to computation methods and exemption thresholds for share disposals.
Practitioners say the same principles apply to crypto disposals.
Companies are also subject to a 15 percent minimum effective tax rate aimed at limiting profit shifting, a floor that applies regardless of how gains are structured.

The push to widen the tax base comes amid mounting fiscal pressure. Timi Silo, tax partner at PwC, said Nigeria faces declining oil revenues, a tax-to-GDP ratio of about 10 percent compared with an African average of 18 percent, and tax collection costs estimated at 4 percent versus a global average of 1 percent.

He argued that a hidden economy has narrowed the tax base, prompting closer scrutiny of digital transactions.

Nigeria has been moving toward taxing the digital economy since introducing its Significant Economic Presence rules in 2019, exposing foreign digital companies with substantial Nigerian users to local tax even without physical offices. The new framework consolidates that direction.

For crypto investors, however, the most consequential change may be procedural. Olamide Obajimi, partner and head of tax at Olaniwun Ajayi LP, said the new regime allows taxpayers to obtain binding written rulings from tax authorities.

Under the previous system, court decisions upheld the position that circulars and advisory opinions issued by tax authorities were not binding law. A taxpayer who relied on official guidance could still face reassessment if the authority later changed its interpretation.

“Now, where the tax authority gives you certain ruling and clarification, you can hold them by those clarifications,” Obajimi said. Provided there is no misrepresentation or fraud, written rulings issued in response to formal applications are binding on the authority.

This creates a formal route to certainty for crypto investors uncertain about valuation methods, timing of disposals, or the treatment of losses. A trader planning a significant liquidation, for example, could seek a ruling on the computation approach before filing returns.

The law also introduces a 30-day timeline for VAT refund decisions and establishes a tax ombudsman for dispute resolution.

However, neither the Nigeria Revenue Service nor LIRS has issued sector-specific public guidance detailing how crypto gains should be calculated in practice, leaving taxpayers to rely on general capital gains principles or seek individual clarification.

The compliance gap is already prompting market responses. Toyin Olufon, managing partner at Lefort, said crypto platforms should consider building tools that track customers’ gains and losses and generate downloadable statements that can serve as evidence for tax filings.

Several startups are positioning themselves to provide that infrastructure. Caesar, which launched in December 2025, describes itself as an infrastructure layer for African fintechs seeking to meet crypto tax requirements. Its co-founder, Olaniyi Gbadeyan, said many firms lack internal systems to comply and need plug-in tax infrastructure.

Tradepal AI has also launched a transaction logging and record-keeping platform aimed at small businesses and informal sector operators preparing for tighter enforcement.

Industry participants say there is still no widely adopted Nigerian-focused crypto tax tool that aggregates trades across exchanges, calculates gains and losses under local rules, and produces documentation suitable for filings or ruling applications.

As enforcement tightens, the central question is shifting from whether crypto gains are taxable to how they will be documented and defended, and which firm builds the dominant compliance infrastructure before authorities begin to test declarations.