PwC Flags Legal Gaps, Enforcement Challenges in Nigeria’s New Virtual Asset Tax Rules

PwC Nigeria has raised significant concerns regarding the legal clarity and practical implementation of Nigeria's new tax rules for virtual assets. The firm's analysis highlights potential legal uncertainties, enforcement gaps, and a substantial compliance burden for Virtual Asset Service Providers (VASPs) operating within the country.

The Nigeria Revenue Service (NRS) issued "Guidelines on the Taxation of Virtual Assets" on July 31, 2026, signaling a move towards formalizing the digital asset sector. However, PwC's "Taxing the intangible" alert points out that the guidelines lack an effective date, despite introducing obligations beyond the existing Nigeria Tax Act and Nigeria Tax Administration Act. This omission creates ambiguity for VASPs and taxpayers alike.

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Does not include any effective date even though it introduces some new obligations that are not in the Nigeria Tax Act (NTA) or Nigeria Tax Administration Act (NTAA).

PwC's report details a complex web of potential tax liabilities. A single virtual asset transaction could trigger multiple taxes, including income tax on gains from disposal, applicable at progressive rates for individuals and 30% for companies. The guidelines also extend income tax to various forms of virtual asset receipts, such as employment income, mining rewards, staking rewards, and airdrops.

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It also applies to income and gifts received in virtual assets, including employment income, professional fees, mining rewards, staking rewards, DeFi rewards and airdrops.

Furthermore, the guidelines impose a 1% withholding tax on gross disposal proceeds for cryptocurrencies, security tokens, and NFTs, with VASPs responsible for collection. Passive income from staking, mining, and DeFi activities faces a 10% withholding tax, while professional fees attract a 5% or 10% WHT. Value Added Tax (VAT) at 7.5% applies to taxable supplies related to virtual asset transactions, such as exchange fees and brokerage commissions, though the transfer of the asset itself is not a taxable supply. VAT also applies to underlying goods or services paid for with virtual assets.

An additional 1.5% stamp duty, borne by the transferee, is imposed on token-to-fiat and fiat-to-token transfers. VASPs must deduct and remit this duty monthly. PwC questions the broader implications of this stamp duty, suggesting it might extend to other property transfers and potentially conflict with existing laws for transactions below N10 million. These issues require careful consideration by the NRS and VASPs as they configure their systems.

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Based on the law, if those transactions (including VAs) are N10m or less, stamp duty should not apply.