When most Africans first discovered cryptocurrency, it felt like entering a brand-new financial world. There were no banks, intermediaries, or taxes. If you made profits, they were all yours. If you sent money home, nobody took a cut.
Freelancers could work for clients abroad and get paid directly, without worrying about delays or hidden charges. For many, it was freedom.
However, that freedom started attracting attention, especially from governments, as the years passed. They saw millions of dollars flowing in and out of their economies through crypto and realised they were missing out on potential revenue. Slowly, the taxman came knocking.
So, what does crypto tax mean? It’s basically governments applying the same rules to digital assets as to regular money, such as salaries, business profits, or property sales.
Depending on the country, it could be a tax on profits when you sell (capital gains), on earnings if you’re paid in crypto (income tax), or even on fees charged by exchanges.
Here are the top 3 African countries where crypto earnings are taxed, and what that means for everyday users.
Kenya
Kenya was the first African country to tax crypto openly. Back in 2022, lawmakers decided the industry couldn’t remain untaxed. By 2023, they rolled out a 3 per cent tax on the total value of every crypto transaction.
That meant if you traded $1,000 worth of Bitcoin, you owed the government $30 even if you made no profit. It was a punishment for traders, freelancers, and families using crypto for remittances.
The backlash was immediate. Industry players fought back, led by the Virtual Assets Chamber of Commerce (VACC) and supported by exchanges like Busha, Swypt, Kotani Pay, and Luno. They argued that the tax was unfair and harmful to Kenya’s fast-growing crypto ecosystem.
Their lobbying worked. By mid-2025, lawmakers scrapped the tax and replaced it with something lighter: a 10 per cent duty on transaction fees charged by exchanges and wallets operating in the country.
This was a big win for the industry. Instead of taxing the full value of every trade, the government now only takes a cut from the service fees platforms charge. In other words, if an exchange charges $10 for a transaction, the state takes $1.
Today, Kenya’s approach is considered one of the fairest on the continent. The government still earns revenue, but users aren’t forced to abandon crypto.
Nigeria
Nigeria has one of the largest crypto communities in the world. With millions of young people trading peer-to-peer, freelancing globally, or sending money home, crypto quickly became part of daily life. The government couldn’t ignore it.
In 2023, Nigeria added digital assets to its tax system through the Finance Act, which introduced a 10 per cent capital gains tax on crypto profits. That was only the beginning.
By 2025, Nigeria had expanded its net:
Capital Gains: Profits from selling crypto are taxed at the corporate rates, and individuals pay based on their income band.
Income Tax: If you earn in crypto, whether through freelancing, mining, or staking, it’s treated like a regular salary and taxed.
Value-Added Tax (VAT): Fees charged by exchanges now attract value-added tax.
The government also doubled down on regulation. The Investments and Securities Act 2025, signed by Bola Ahmed Tinubu, classified securities under the Securities and Exchange Commission (SEC). This means stricter rules, audits, and compliance checks.
Nigeria is serious about enforcement. Agencies like the Federal Inland Revenue Service (FIRS) and the Economic and Financial Crimes Commission (EFCC) actively monitor transactions and demand compliance from platforms. The 2024 case with Binance showed how far authorities are willing to go.
Nigeria’s stance is clear: it wants complete oversight of the digital economy. For users, that means less anonymity and more paperwork. But it also implies crypto is no longer a fringe activity; it’s now recognised as part of Nigeria’s formal financial system.
South Africa
South Africa took a strategic approach. Instead of inventing new taxes, it simply fitted crypto into its existing system. The South African Revenue Service (SARS) treats crypto as a valuable asset.
That means you pay capital gains tax if you sell it as an investment and make a profit. Earning it through mining, staking, or freelance work is taxed as regular income, with rates going up to 45 per cent.
This approach makes South Africa one of the easiest markets for crypto taxation. The Financial Sector Conduct Authority (FSCA) has also stepped in, classifying crypto as a financial product. That means exchanges and service providers must register and comply with strict anti-money laundering (AML) and counter-terrorist financing (CTF) rules.
But not everything is settled. In 2025, a High Court ruled that crypto doesn’t count as currency or capital under the country’s Exchange Control Regulations. Those rules don’t cover crypto, but the South African Reserve Bank (SARB) has appealed, leaving the sector in legal limbo.
Meanwhile, SARS is stepping up enforcement. It has announced plans to use AI and machine learning to detect undeclared crypto holdings. Exchanges are under pressure to collect and share more user data, making compliance a central part of the business.
South Africa’s stance is balanced: It recognises crypto as valuable but also wants it tightly managed within the financial system.
What governments aim to gain
Taxing crypto isn’t just about money for governments, though new revenue streams are always welcome. It’s also about visibility. Tax rules allow them to monitor once-hidden flows, fight illegal activity, and modernise their financial systems.
Most importantly, it brings legitimacy. By taxing crypto, governments signal that digital assets are here to stay, which can attract bigger investors and give citizens more confidence in the ecosystem.
However, what users lost before taxation was easier for crypto users. Traders kept every cent of their profit, and families sending money abroad avoided heavy bank charges.
Freelancers earn in peace without worrying about tax forms. Privacy was also higher since nobody shared data with the authorities.
Those days are gone. Today, profits are slimmer, transactions are monitored, and exchanges are required to report user data.
What users gained
Still, it’s not all bad news. With taxation comes recognition. Once treated as a shadow economy, crypto is now seen as legitimate. That means governments are less likely to ban it outright, and institutions are more willing to engage. For the long-term health of Africa’s digital economy, this recognition could be just as valuable as the profits users once kept untaxed.
The message for citizens is simple: compliance is key. That means keeping records of every trade, declaring profits or losses, and using registered exchanges.
In Kenya, you only need to worry about the fees that exchanges charge.
In Nigeria, both profits and income must be reported.
In South Africa, you must know whether your crypto counts as capital gains or income.
Playing by the rules may reduce your earnings, but it also keeps you safe from penalties and ensures you’re part of a system that now officially acknowledges digital assets.