A group of stakeholders in the digital asset ecosystem, Digital Assets Coalition, has warned that Nigeria’s virtual asset economy, currently valued at $92 billion, could face reduced investment and slower expansion because of the new tax rules introduced by the Nigeria Revenue Service (NRS).
The warning comes amid concerns that transaction-based charges under the new Guidelines on the Taxation of Virtual Assets could increase the cost of participating in the sector, discourage innovation and weaken the contribution of virtual assets to Nigeria’s broader digital economy.
Speaking at a media parley in Lagos on Thursday, Spokesperson of the Coalition, Mr Obinna Iwuno, warned that the tax structure could have unintended consequences for a sector that has become an important channel for global payments, remittances, savings and income generation, especially among young Nigerians.
What they are saying
According to him, while the group supports taxation, the structure of the taxes could lead to a shift of economic activities to offshore platforms.
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- “We support the taxation of virtual assets without qualification. Our concern is with a design choice that taxes the movement of money itself.
- “This charge falls on a remittance to a student abroad, on a freelancer converting earnings already taxed as income, and on a trader in a year they lost money. That is not a tax on profit; it is a toll on participation,” Iwuno said.
The Coalition, an alliance representing digital asset participants and operators in Nigeria, said the country’s virtual asset market, currently the largest in Sub-Saharan Africa, has grown into a significant part of the emerging digital economy and should be protected from policies that could limit investment and economic activity.
Mr Iwuno said the sector had created new opportunities for Nigerians to participate in global markets by providing access to cross-border payments, freelance income channels and alternative financial tools amid economic challenges.
He warned that placing additional costs on transactions rather than actual profits could push users and businesses away from regulated domestic platforms, reducing transparency and limiting government’s ability to benefit from the sector through sustainable taxation.
- “The people who built this market are largely young Nigerians using it as working infrastructure for global earnings and savings. You cannot tax your way into the future by taxing the people building it,” Iwuno said.
Contentious provisions
Iwuno raised concerns over some provisions of the guidelines, particularly the application of taxes on the gross value of transactions regardless of whether a user records profit or loss.
He identified the 1.5% stamp duty on every conversion between naira and digital assets and the 1% withholding tax on the total value of every sale as measures that could increase costs for businesses and individual users.
According to him, a system that taxes transaction volumes instead of realised gains could discourage legitimate economic activities and make Nigeria less attractive to digital asset investors.
He noted that the impact would be more significant for small users who conduct frequent low-value transactions, as charges could accumulate even where there are no meaningful financial returns.
- “The objective of tax policy should be to expand the tax base, not shrink economic participation. A system that drives activity away from regulated channels will ultimately reduce the revenue opportunities available to government,” Iwuno said.
Iwuno also criticised the requirement for taxpayers to remit taxes in digital tokens, arguing that it conflicts with the Nigeria Tax Administration Act, 2025, which provides for tax payments in currency.
He noted that other countries that introduced similar transaction-based tax models had experienced challenges, including reduced trading activity and the movement of users to offshore platforms.
Call for a review
He urged policymakers to consider the long-term economic implications of the framework and adopt a model that balances revenue generation with market growth.
Iwuno also called for a review of the guidelines, wider consultation with industry participants and the introduction of a tax structure that focuses on actual profits, protects smaller users and allows Nigeria’s virtual asset industry to continue contributing to economic growth.
- “This is not a fight against taxation. It is a request for a design that works for citizens and the Revenue Service alike. A workable framework will help government generate revenue while ensuring that innovation, investment and economic opportunities are not pushed away from Nigeria,” Iwuno said.
What you should know
Nairametrics earlier reported that new guidelines on the taxation of virtual assets have triggered debate among cryptocurrency investors, traders and industry stakeholders, with some warning that excessive taxation could discourage innovation, while others welcome the clarity provided by the framework.
Some users also questioned whether airdrops should be subject to taxation, while others argued that the guidelines provide greater clarity on how existing tax obligations apply to digital assets.
The guidelines came weeks after President Bola Tinubu signed the Presidential Executive Order on Virtual Assets Coordination, 2026, establishing a coordinated regulatory framework for cryptocurrencies, stablecoins, tokenised assets and other digital financial products.
