By: Ibraheem Muhammad Mustapha
Introduction:
With the passage of Nigeria’s new tax laws, a flurry of posts have gone viral on social media, causing significant alarm among the nation’s cryptocurrency community. The claims suggest the government is imposing a new, special tax on all digital asset transactions, with some posts even mentioning a specific “7% fee-sharing deal” with crypto exchanges. This fact-check dissects the new laws to clarify what is actually happening.
The Claim:
The Nigerian government has introduced a new, special “crypto tax,” possibly a 7% charge on transactions, that will apply to all crypto activities, including trading, NFTs, airdrops, and mining.
Verdict: FALSE / MISLEADING.
The new laws do not create a new, special, or separate “crypto tax.” Instead, they officially clarify that profits and income from digital and virtual asset transactions are subject to existing tax categories, such as Capital Gains Tax and Income Tax. The claims of a blanket “7% fee-sharing” deal are unsubstantiated and not found anywhere in the new legislation.
Verification:
The viral claims are a misinterpretation of how the new legal framework integrates digital assets into the national tax system. Here’s a detailed breakdown of what the law actually says.
There is No New “Crypto Tax”
The most crucial point is that the legislation does not invent a new type of tax called “crypto tax.” It simply extends the reach of existing taxes to cover digital assets. Think of it this way: if you sell a piece of land and make a profit, you pay Capital Gains Tax. The new law clarifies that if you sell a digital asset (like Bitcoin or an NFT) and make a profit, that profit is also subject to Capital Gains Tax. The tax type is the same; only the asset class is newly specified.
What the Law Actually Says
The new rules are primarily located in two documents:
1. The Nigeria Tax Act (NTA), 2025 now officially recognizes gains from crypto as taxable. Section 4(1)(j) on Page 20 adds “profits or gains from transactions in digital or virtual assets” to the list of chargeable incomes. For Capital Gains Tax, Section 34(1)(a) on Page 39 now includes “digital or virtual assets” as a chargeable asset.
The Nigeria Tax Administration Act (NTAA), 2025 provides the most detailed rules in its Fifth Schedule (Page 79). This is the engine room of the new policy, and it clarifies which activities are considered taxable events. This schedule confirms that activities like the sale or exchange of assets, income from staking or mining, and airdrops received as compensationare all considered taxable events.
How Existing Taxes Apply to Your Crypto Activities
Based on the Fifth Schedule of the NTAA, here is how different crypto activities are now taxed under existing laws:
• Trading Crypto or NFTs: When you sell a digital asset for a profit (e.g., you buy Bitcoin at N100 and sell it at N150), your N50 profit is subject to Capital Gains Tax (CGT). This is the same tax you would pay on profits from selling stocks or property.
• Getting Paid in Crypto: If your employer or a client pays you for your work in a cryptocurrency, that payment is treated as Personal Income Tax (PIT), just like a regular salary paid in Naira.
• Staking and Mining: Any rewards you earn from staking your crypto or from mining activities are considered a form of income. Therefore, these earnings are subject to Personal or Corporate Income Tax.
• Airdrops: The viral claim that airdrops are exempt is false. The law clarifies that airdrops received as compensation for a service or as part of a promotional reward are treated as income and are therefore taxable.
• Using Crypto for Payments: If you use cryptocurrency to pay for goods or services, the transaction is subject to Value Added Tax (VAT), and the seller must account for the payment as income, just as if they had been paid in Naira.
In summary, the government has not created a new punitive tax. It has simply closed a loophole by making it clear that digital assets are not a tax-free zone and must be treated like any other form of property or income.
The Real Story Behind the “7.5% VAT” Claim (The KuCoinContext)
The specific rumor of a 7.5% charge comes from a verifiable, but separate, event from July 2024. According to a report by Techpoint Africa, the global crypto exchange KuCoin announced it would begin charging a 7.5% Value Added Tax (VAT) on its services for Nigerian users.
It is critical to understand the following:
1. It’s a VAT on the Fee, Not the Transaction: KuCoin did not charge 7.5% on the entire transaction value. They charged 7.5% VAT on their 0.1% transaction fee. For example, on a $1,000 trade, KuCoin’s fee is $1 (0.1%). The VAT is 7.5% of that $1 fee, which is just $0.075.
2. This Was a Company Complying with Existing Law: KuCoin was applying Nigeria’s standard 7.5% VAT rate to the service it provides (i.e., the transaction fee). This was a company-specific move to comply with existing Nigerian VAT laws, likely due to regulatory pressure in 2024 that saw other exchanges like Binance exit the market.
3. It Is Not Part of the New 2025 Tax Acts: KuCoin’s action pre-dates the new laws by over a year and is not related to the new framework for Capital Gains Tax or Income Tax on digital assets.
Conclusion
The claim that Nigeria has introduced a new, special “crypto tax” of 7.5% on all transactions is misleading. The new 2025 tax laws have simply clarified that income and gains from digital assets are subject to existing taxes like CGT and PIT. The “7.5% charge” rumor is a misinterpretation of an old, company-specific action taken by KuCoin in 2024 to apply standard VAT to its service fees, and it is not a part of the new national tax law.
