Pay Taxes on Crypto Income in Nigeria: Your 2024 Compliance Guide

The Rising Need for Crypto Tax Compliance in Nigeria

As cryptocurrency adoption surges across Nigeria, with over 33% of the population engaging in crypto transactions according to Statista, understanding tax obligations has become critical. The Federal Inland Revenue Service (FIRS) now actively enforces tax regulations on digital assets. This guide explains how to legally pay taxes on crypto income in Nigeria, helping you avoid penalties while maximizing compliance.

Is Cryptocurrency Income Taxable in Nigeria?

Yes. Under Nigeria’s Finance Act 2020 and FIRS guidelines, cryptocurrencies are classified as “capital assets” or “trading stock,” making profits subject to taxation. The Capital Gains Tax Act (CGTA) imposes a 10% tax on gains from crypto disposals, while companies pay Companies Income Tax (CIT) at 30% on trading profits. Non-residents earning crypto income from Nigerian sources are also liable.

Types of Crypto Income Subject to Tax

Nigerian taxpayers must declare:

• Crypto Trading Profits: Gains from buying low and selling high on exchanges
• Mining Rewards: Value of coins received from mining operations
• Staking/Yield Farming Earnings: Rewards generated through DeFi protocols
• Airdrops & Hard Forks: Free tokens received must be valued at market price
• Crypto-Payment for Services: Income from freelance work paid in cryptocurrency

Step-by-Step Guide to Calculate Your Crypto Tax

Follow this methodology:

1. Track All Transactions: Document dates, amounts, and Naira value at transaction time
2. Calculate Cost Basis: Use FIFO (First-In-First-Out) method for acquisitions
3. Determine Gains/Losses: Selling Price minus Cost Basis = Taxable Gain
4. Apply Allowable Deductions: Include transaction fees and mining equipment costs
5. Convert to Naira: Use CBN’s official exchange rate at transaction date

Example: If you bought 0.5 BTC at ₦10,000,000 and sold at ₦15,000,000, your taxable gain is ₦5,000,000. Capital Gains Tax due: 10% of ₦5,000,000 = ₦500,000.

Filing and Payment Process with FIRS

1. Register for a Tax Identification Number (TIN) via the FIRS e-Services portal
2. File Capital Gains Tax returns using Form CGTT 1
3. Declare crypto income in your annual Company Income Tax Return (for businesses)
4. Pay electronically through Remita platform using “Capital Gains Tax” as payment type
5. Keep records for 6 years: Exchange statements, wallet addresses, and valuation proofs

Penalties for Non-Compliance

Failure to pay crypto taxes in Nigeria risks:

• 10% penalty on unpaid taxes + 21% annual interest
• Account freezes on financial institutions
• Criminal prosecution with up to 3 years imprisonment
• Blacklisting from government contracts and loans

The FIRS now uses blockchain analytics tools like Chainalysis to trace high-volume transactions, making non-compliance increasingly risky.

FAQ: Paying Taxes on Crypto Income in Nigeria

Do I pay tax if I hold cryptocurrency without selling?

No. Taxes apply only upon disposal (selling, trading, or spending crypto). Unrealized gains aren’t taxed.

How are crypto-to-crypto trades taxed?

Each trade is a taxable event. Exchanging BTC for ETH triggers capital gains tax on the BTC disposal based on its Naira value gain.

Can I offset crypto losses against taxes?

Yes. Capital losses can be carried forward for 5 years to offset future capital gains, reducing your tax burden.

Is peer-to-peer (P2P) trading taxable?

Absolutely. All disposal events – including P2P platforms like Binance P2P – require tax reporting based on transaction value.

When is the crypto tax filing deadline?

For individuals: April 30th annually. Companies must file within 18 months after incorporation and annually thereafter.

Does FIRS tax NFT transactions?

Yes. NFT sales are treated as disposal of capital assets, subject to 10% Capital Gains Tax on profits.

Staying Compliant in Nigeria’s Evolving Crypto Landscape

With the SEC developing comprehensive crypto regulations and FIRS expanding enforcement, proactive tax compliance is essential. Consult a certified tax advisor specializing in digital assets, maintain meticulous records using tools like Koinly or Accointing, and file returns promptly. Properly paying taxes on crypto income in Nigeria not only avoids penalties but establishes you as a legitimate participant in the digital economy.