Nigeria’s new tax reform will officially kick in on January 1, 2026, changing how individuals, businesses, and crypto traders handle their money.
The big idea is that the government wants people to be more intentional about managing taxes—no more automatic reliefs.
If you earn less than ₦800,000 a year, relax—you still won’t pay personal income tax. But here’s the twist: to reduce your tax bill once you cross that threshold, you must invest in specific things.
That could mean contributing to your retirement account, buying life insurance, paying into the national housing fund, or enrolling in the health insurance scheme. Even rent gives you some relief—20 per cent of what you pay, up to ₦500,000.
So instead of the system automatically giving you deductions, you’ll need to show proof of smart financial decisions before you enjoy the benefits.
The tax on the business sector
Small businesses with an annual turnover below ₦50 million won’t pay corporate income tax either. That’s good news. But don’t forget that Value Added Tax (VAT) and electronic transfer levies remain.
To avoid trouble, business owners should keep receipts, scan documents, and ideally work with a financial expert. In short, they should create a paper (or digital) trail that shows their transactions are clean.
Now to the hot topic—crypto. If you’re just holding your Bitcoin, Ethereum, or any other token, no worries, no tax. But once you sell at a profit, that income counts.
Let’s say you made ₦1.8 million from a Bitcoin trade—that’s taxable because it’s above the ₦800,000 threshold. Staking rewards also fall under taxable income. Losses, on the other hand, don’t attract tax.
The same rule applies to companies trading crypto: if your turnover stays below ₦50 million, you skip corporate tax but still handle VAT and transfer charges.
Why the government is targeting the crypto sector
Nigeria’s crypto market is vast — more than $56.7 billion worth of transactions passed through it in just one year. That’s too big for regulators to ignore, so the government is rolling out new laws to tax, monitor, and control the industry.
But this raises a tricky question: is crypto the culprit behind the naira’s collapse, widespread tax evasion, and even terrorism financing — or is it just a convenient scapegoat for deeper economic problems?
The government is treating crypto as both a risk and an opportunity. The Investments and Securities Act (ISA) 2025 recognises virtual/digital assets as securities and places them under the Securities and Exchange Commission oversight.
That gives them a legal foundation to license and supervise exchanges, custodians, Virtual Asset Service Providers, and token issuers.
In 2024, the Federal Inland Revenue Service (FIRS) hinted that it is drafting an executive bill to overhaul revenue administration and more clearly capture digital-asset activity for tax purposes.
Zacch Adedeji, chairman of FIRS, revealed, “We cannot run away from the cryptocurrency ecosystem because it is the in-thing. But as it stands in Nigeria today, no law regulates cryptocurrency operations.”
“We need a law that regulates that area of our economy. This is why we are engaging with legislators. We will regulate it in a way that is not injurious to the economic development of Nigeria.”
This provides regulatory status for digital assets. The FIRS bill aims to modernise tax rules and collection mechanisms so crypto flows don’t escape the tax net.
That’s understandable because, according to Chainalysis, the country’s crypto market recorded $56.7 billion in transactions between July 2022 and June 2023 and is one of the largest peer-to-peer markets in the world.
With oil revenues waning, policymakers see digital assets as an additional source of tax revenue and a way to widen the tax base.
The government has also passed the Nigeria Tax Administration Act (NTAA) 2025, set to take full effect in 2026. This act tightens registration, reporting, and penalties for Virtual Asset Service Providers (VASPs).
The NTAA prescribes an initial ₦10 million fine for the first month of non-compliance and ₦1 million for each subsequent month and empowers regulators to suspend or revoke licences for persistent default.
Naira volatility: crypto as amplifier, not root cause
Officials frequently point to peer-to-peer crypto markets as a channel that increases demand for foreign currency and undermines the naira.
P2P platforms and stablecoins can indeed provide faster, more accessible routes to dollars than official FX windows — and that matters in a market where access to FX is rationed and fragmented.
“I’ve particularly seen fintechs offering this service, and what Bitget does is provide the technological resources for them to build on top of it. Stablecoins can solve the cross-border problems we face in Africa,” said lead marketing at BitGet Africa, Munene Mathendu.
“We’re looking at standardised payment solutions where there’s no need for FX conversions. He noted that that’s a massive step toward making money move across borders with ease—fast, secure, and cheap.
But the naira’s troubles predate mass crypto adoption. Structural factors — heavy dependence on oil receipts, weak export diversification, rising import bills, fiscal slippages, and inconsistent FX policy — have long eroded confidence in the currency. In 2025, inflation spikes linked to subsidy reform and food-price shocks deepened those vulnerabilities.
So: crypto can exacerbate FX stress, but it is not the primary cause. Treating it as the singular culprit risks missing the more entrenched macroeconomic failures that need fixing.
Tax evasion: new tools, old problems
Crypto’s pseudonymous, cross-border nature creates opportunities to hide income, shift assets offshore, or obscure taxable events, making it attractive for tax avoidance.
Yet Nigeria’s tax-collection problem is broader and older. A large informal economy, weak taxpayer registration, limited enforcement capacity, and outdated laws have long kept many transactions outside the tax net.
The Finance Act of 2022 included provisions to tax digital gains (a proposed 10% tax on profits from digital assets), but enforcement lagged.
The FIRS’s executive bill, the NTAA, and ISA 2025 together signal a more coordinated push: legal recognition (ISA), tax rules and penalties (NTAA), and administrative reform (FIRS).
With VASPs registered, VAT properly collected, and transaction reporting enforced, the state could recover meaningful revenue if implemented effectively. However, the core problem remains: poor tax administration and informality, not crypto alone.