Nigeria Eyes 2026 Crypto Tax, Users Fear P2P Rise

Nigeria’s plan to begin taxing cryptocurrency transactions under the Nigeria Tax Administration Act (NTAA) from 2026 is generating unease among digital asset operators, who warn that the move could push traders back into peer-to-peer (P2P) channels.

Industry players argue that the combination of new tax obligations, stricter reporting duties, and the continued absence of full regulatory clarity could discourage users from transacting on licensed exchanges. Many fear the policy may undermine efforts to formalise the crypto economy.

Under the NTAA, Virtual Asset Service Providers will be required to register with the tax authority, retain KYC information for up to seven years, and file reports of large or suspicious transactions to both the tax agency and the Financial Intelligence Unit. The law also imposes penalties for failing to comply, starting with a ten-million-naira fine in the first month and an additional one-million-naira penalty for each subsequent month. Exchanges also risk suspension or licence withdrawal by the Securities and Exchange Commission.

The Act classifies taxable virtual asset activities to include the sale, exchange, or transfer of digital assets, earnings generated from mining or staking, rewards such as airdrops or bounties, and any use of virtual assets as payment for goods or services.

Stakeholders warn that the increased compliance burden will weigh heavily on retail users, who make up the bulk of Nigeria’s crypto community. The Convener of Lagos Blockchain Week, Chukwuemeka Enoch Mbaebie, said the mandatory KYC layers, NIN and TIN linkages, and quarterly reporting obligations could drive traders back to informal P2P networks where oversight is weaker.

He predicted a fresh rise in P2P activity, cautioning that such a shift would complicate monitoring, heighten risks of capital flight, and reduce transparency in the digital asset space.

Sharing similar concerns, the President of the Stakeholders in Blockchain Technology Association of Nigeria, Obinna Iwuno, warned that the tax regime might unintentionally strengthen underground markets. He noted that earlier policy changes, such as the introduction of VAT on some exchanges, had already pushed many traders away from regulated platforms.

Iwuno said the timing of the tax rollout is problematic because Nigeria has yet to issue full operating licences to crypto exchanges, with only a few firms holding Approval-in-Principle status. According to him, expanding licences and speeding up the regulatory incubation programme would support proper supervision and reduce reliance on unregistered P2P networks. He argued that licensed operators, once fully established, would help curb illegal activity because they would naturally protect their investments by reporting unlicensed competitors.

He added that what the industry needs is government support to grow, not restrictive taxation. In his view, incentives such as tax holidays or friendly tax terms would help the sector expand, giving the government greater long-term benefits from a mature digital asset economy.