How to Report Crypto Income in Nigeria: A Complete FIRS Tax Guide

Understanding Crypto Income Reporting in Nigeria

With Nigeria ranking among Africa’s top cryptocurrency markets, understanding how to report crypto income to the Federal Inland Revenue Service (FIRS) is crucial. All crypto earnings – including trading profits, mining rewards, staking income, and airdrops – qualify as taxable income under Nigerian law. Non-compliance risks penalties up to ₦50,000 plus interest on unpaid taxes. This guide breaks down the step-by-step process to stay compliant.

Legal Framework for Crypto Taxation

Nigeria’s tax authority FIRS treats cryptocurrency as a capital asset subject to taxation under existing laws:

• Capital Gains Tax Act: Applies to profits from selling crypto assets (10% tax rate)
• Personal Income Tax Act: Covers crypto mining income and professional trading profits
• Companies Income Tax Act: For corporate crypto transactions (30% tax rate)

FIRS Circular 2021/04 explicitly states that crypto transactions must be reported like traditional assets. Tax residency determines obligations – residents pay tax on global crypto income.

Step-by-Step Reporting Process

Step 1: Calculate Your Taxable Income
Track all transactions using crypto tax software or spreadsheets. Taxable events include:

• Selling crypto for fiat (naira or foreign currency)
• Trading between cryptocurrencies
• Receiving staking/mining rewards
• Spending crypto for goods/services

Step 2: Determine Tax Category
Classify income based on activity:

• Capital Gains: Profit from selling after holding >12 months
• Business Income: Frequent trading (taxed at individual income bracket rates)

Step 3: File with FIRS
Use these documents:

1. Complete Self-Assessment Form
2. Attach Capital Gains Tax Declaration (Form CG T1)
3. Submit through FIRS e-filing portal or tax office

Step 4: Payment Deadlines
Pay by 31st December for individuals. Companies must pay within 6 months after accounting year-end.

Record-Keeping Requirements

Maintain detailed records for 6 years:

• Transaction dates and values (in Naira)
• Wallet addresses and exchange statements
• Receipts for crypto purchases
• Calculations of cost basis and gains

Convert foreign crypto values to Naira using official CBN exchange rates on transaction dates.

FAQs: Reporting Crypto Income in Nigeria

Q: Do I pay tax if I hold crypto without selling?

A: No tax applies until you dispose of crypto through sale, trade, or spending. Holding isn’t taxable.

Q: How is crypto-to-crypto trading taxed?

A: Each trade is a taxable event. Calculate naira value when acquired and disposed – the difference is your gain/loss.

Q: Are peer-to-peer (P2P) transactions reportable?

A: Yes. FIRS requires reporting all crypto income regardless of platform. Maintain P2P transaction proofs.

Q: What if I trade on international exchanges?

A: Nigerian tax residents must declare global crypto income. Convert earnings to naira using CBN rates.

Q: Can I deduct crypto losses?

A: Capital losses can offset capital gains in the same tax year. Unused losses carry forward for 5 years.

Avoid These Common Mistakes

• Ignoring small transactions: All crypto activity must be reported regardless of amount
• Using unofficial exchange rates: Always apply CBN’s published rates
• Missing deadlines: Late filings incur 10% penalty plus monthly interest
• Not seeking professional help: Consult a tax advisor for complex cases

FIRS is increasing crypto tax enforcement through blockchain analysis tools. Proactive compliance protects you from audits and penalties. Keep detailed records, calculate gains accurately, and file before deadlines to operate securely within Nigeria’s regulatory framework.