New crypto tax rules spark industry concerns over 1.5% stamp duty

Nigeria’s first comprehensive framework for taxing cryptocurrencies and other virtual assets is facing pushback from industry stakeholders, who argue that a new 1.5 percent stamp duty and stricter compliance requirements could increase the cost of trading and drive users away from regulated platforms.
The Nigeria Revenue Service (NRS) on Monday released the Guidelines on the Taxation of Virtual Assets, setting out how cryptocurrencies, stablecoins, non-fungible tokens (NFTs), decentralised finance (DeFi) activities, and other digital assets will be taxed under the Nigeria Tax Act and the Nigeria Tax Administration Act, both enacted in 2025.

While stakeholders described the framework as one of the most detailed crypto tax regimes introduced by an African country, many questioned the decision to impose a 1.5 percent stamp duty on fiat-to-crypto and crypto-to-fiat conversions, arguing that the additional charge could discourage users from regulated platforms and increase the overall cost of compliance.
“The 1.5 percent stamp duty on on/off-ramping has called for so many debates, especially regarding its execution,” said Favour Uche, a fintech and Web3 compliance lawyer.

Anita Ezeamama, a legal and tax adviser, said the provision was among her biggest concerns, arguing that the guideline would have benefited from broader industry consultation before it was issued.
Industry participants say the concern is not with taxing digital assets itself but with how multiple tax obligations could apply across a crypto transaction. Under the guidelines, profits from virtual asset disposals may attract income tax, exchanges are required to deduct withholding tax in certain cases, and VAT applies to exchange service fees, while a separate 1.5 percent stamp duty is charged on cash-to-crypto and crypto-to-cash conversions.

“The stamp duty is structured more like an excise tax,” Uche wrote in an analysis of the guidelines. “For active traders converting fiat to tokens and back repeatedly, the duty applies on every conversion leg, which compounds meaningfully over a year of active trading.”

He warned that higher transaction costs could encourage traders to migrate back to informal peer-to-peer (P2P) channels outside regulated exchanges, reducing rather than improving tax visibility.

Franklin Peters, executive chairman of the Virtual Asset Service Providers Association (VASPA), said the framework represented significant progress in recognising digital assets within Nigeria’s tax system but questioned whether some provisions would prove practical.

“If compliant businesses carry taxes and reporting costs that informal operators can simply avoid, the government creates a strange market incentive: opacity becomes cheaper than transparency,” Peters said.
He also criticised the absence of a public consultation period before the guidelines were finalised, noting that countries such as South Africa typically publish draft tax guidance for stakeholder comments before implementation.

Despite the concerns, several experts commended the technical quality of the framework.
Unlike many tax regimes, Nigeria’s guidelines adjust taxable gains for exchange rate movements, meaning investors are taxed only on their real economic gains rather than naira depreciation. The framework also distinguishes between different classes of virtual assets, including cryptocurrencies, stablecoins, utility tokens, and NFTs, and provides separate tax treatments for staking rewards, DeFi income, mining, airdrops, and token swaps.

The guidelines also require Virtual Asset Service Providers (VASPs) to verify customers’ Tax Identification Numbers (TINs), maintain detailed transaction records, and comply with reporting obligations, with penalties for non-compliance.
The move marks Nigeria’s clearest attempt yet to integrate the country’s fast-growing digital asset economy into the formal tax system after years of regulatory uncertainty.
However, analysts say the success of the framework will ultimately depend on whether the government can balance revenue collection with maintaining an environment attractive enough for users and businesses to remain within the regulated ecosystem.