Nigeria Unveils New Cryptocurrency Tax Framework: What You Need to Know
In a significant development for Nigeria’s cryptocurrency landscape, the government has detailed its approach to taxing crypto profits, set to take effect in January 2026. The new framework introduces clear guidelines on how cryptocurrency gains will be subject to personal income tax.
Under the new regulations, cryptocurrency traders will face a 15% tax rate on their net profits, but only after a tax-free threshold of ₦800,000 ($545.82). This progressive approach aims to protect smaller investors while ensuring larger gains contribute to the national revenue.
To illustrate how the system works, consider this example: If an investor purchases bitcoin worth $2,000 (₦2.93 million) and later sells it for $4,000 (₦5.86 million), the resulting profit of $2,000 (₦2.93 million) would be taxable. After applying the tax-free allowance of ₦800,000, the remaining ₦2.13 million ($1,454.18) would be taxed at 15%, resulting in a tax payment of ₦319,704 ($218.13).
Importantly, the framework includes provisions for losses. If an investor faces a loss – for instance, buying bitcoin at $2,000 (₦2.93 million) and selling at $1,500 (₦2.19 million) – no tax would be applicable on the transaction.
Taiwo Oyedele, chairman of the Presidential Fiscal Policy and Tax Reforms Committee, emphasized during a media briefing on Friday that cryptocurrency investment remains legal in Nigeria. “It is not a crime to invest in crypto. If your net gain is small, below the threshold (₦800,000), your tax is 0%,” he stated.
This new tax structure represents Nigeria’s first comprehensive attempt to regulate cryptocurrency profits, aligning with global trends in digital asset taxation while maintaining a balanced approach to encourage legitimate cryptocurrency trading.
