Nigeria’s newly implemented crypto tax law marks a transformative step in the regulation of virtual assets within the country. This landmark legislation, outlined under the Nigerian Tax Administration Act 2025, is set to enhance transparency and accountability in cryptocurrency transactions by linking them to verified identities. If you’re a crypto trader, investor, or platform operator, here’s everything you need to know about this development.
Mandatory Identity Collection: What’s Required?
To ensure traceability, all Virtual Asset Service Providers (VASPs) must now collect a range of mandatory identification details from their customers. These include:
- Full name
- Address
- Telephone number
- Email address
- Tax Identification Number (TIN)
- National Identity Number (NIN) for individuals
By establishing a direct connection between virtual asset activities and real-world identities, Nigeria aims to address the historical challenges of crypto’s untraceable nature, protecting against fraudulent transactions and evasion of tax obligations.
Monthly Reporting Obligations
From 2025 onwards, all VASPs must submit detailed monthly reports to tax authorities. This includes information related to crypto exchanges, sales, transfers, and escrow activities. These reports will capture data such as:
- Transaction type and value
- Transaction date
- Virtual asset type
- Complete identity details of parties involved (including secondary parties)
These measures allow authorities to map transactional networks and monitor fund flows, integrating crypto oversight with broader anti-money laundering (AML) efforts.
Impact on Traders
For individual traders, the new law introduces self-declaration requirements. Traders must report their crypto profits under applicable individual income tax categories. Accurate record-keeping, as stated under Article 31 of the law, is now crucial to avoid penalties.
The recent tax amendments also build on the 2022 Finance Act, which introduced a 10% levy on digital asset profits. However, without proper identification mechanisms, enforcement of this earlier framework faced significant challenges. The 2025 identity-linked guidelines aim to bridge that gap, promoting a more regulated crypto economy.
Penalties for Non-Compliance
Failure to comply with the new provisions can result in severe penalties for VASPs:
- Initial fines of ₦100,000
- Additional monthly fines of ₦10,000 for prolonged non-compliance
- Risk of license suspension or revocation
Large or suspicious transactions are also subject to dual reporting to the Nigerian Financial Intelligence Unit, further aligning the crypto tax law with the country’s anti-money laundering and security regulations.
What This Means for You
Whether you’re a trader or a service provider, it’s essential to adapt to these new regulations. Implement robust Know Your Customer (KYC) systems, maintain comprehensive transaction records for at least seven years, and ensure timely reporting to authorities. Compliance will not only protect you from legal repercussions but also contribute to a healthier and more trustworthy crypto ecosystem.
Looking for the right tools to help you stay compliant? Check out Chainalysis, a leading blockchain analysis platform that supports VASPs with transaction monitoring and risk management solutions.
Final Thoughts
Nigeria’s approach to crypto taxation and identity verification may set a precedent for other nations seeking to integrate blockchain technology within their tax frameworks. By aligning cryptocurrency trades with verified identities, the country aims to create a more accountable and transparent crypto market. Understanding and adapting to these changes will be critical for stakeholders to thrive in this evolving landscape.
