22/09/2025
🔥 *A MUST READ FOR "NIGERIAN" CYPTO ENTHUSIASTD* 🔥
Fifth Schedule
Section 79
VIRTUAL ASSETS
Registration
1. (1) A taxable person engaging in virtual assets related activities, including the exchange, trading, custody, or issuance of virtual assets, shall register with the relevant tax authority as a Virtual Assets Service Provider (VASP) for tax purposes.
(2) A VASP operating in Nigeria shall obtain a license from the Securities and Exchange Commission before commencement of business.
Relevant authority
2. (1) Subject to section 79 of this Act, the Securities and Exchange Commission shall have regulatory oversight over virtual assets that qualify as securities only.
(2) Among other determinants, virtual asset shall be classified as a security where —
(a) it is an investment of money or other assets;
(b) the investment of money or other assets is in a common enterprise;
(c) there is an expectation of profits from the investment; and
(d) any profit comes from the efforts of a promoter or third-party.
*Taxable transactions*
3. (1) Taxable virtual assets transactions shall include —
(a) the sale, exchange, or transfer of virtual assets;
(b) mining or staking activities that generate income;
(c) airdrops, bounties, or any form of virtual asset received as compensation or reward; and
(d) any other transaction or activity relating to virtual assets.
(2) Transaction where payment for goods and services is made with virtual assets, shall —
(a) be subject to the same tax treatment as transactions conducted in fiat currency;
(b) have the same value as the goods and services, determined at the market price at the time of the transaction; and 👇
Come January 2026, this law means:
1. Mandatory Registration & Licensing
If you deal in crypto in Nigeria (exchange, trading, custody, or even launching a token), you must register with the tax authority as a Virtual Asset Service Provider (VASP).
You must also obtain a license from the Securities and Exchange Commission (SEC) before doing business.
👉 This creates extra steps and costs for small businesses and individuals who may just be running peer-to-peer (P2P) trading or small crypto services.
2. Regulatory Oversight
The SEC will regulate only virtual assets that behave like securities (i.e., tokens or coins where people invest money expecting profit from a team, promoter, or company).
In short, if your coin/project looks like an "investment scheme," the SEC will treat it like stocks or bonds.
👉 This means stricter rules, and some projects may be shut down or taxed heavily.
3. Taxable Crypto Transactions
Almost every way you can earn crypto will now be taxed:
Selling, trading, or swapping crypto (even between two coins).
Mining or staking rewards (even if you earn a little from staking your coins).
Airdrops and bounties (even free tokens you didn’t buy will be taxed as income).
Any other activity involving crypto.
👉 This means crypto users will have to report and pay tax for almost every earning in crypto — even small ones.
4. Crypto Payments for Goods & Services
If you buy or sell goods/services with crypto, it will be taxed the same as cash transactions.
The value of the crypto at the time of purchase will be used for tax calculation.
👉 This removes the advantage of using crypto as an easier or cheaper way to pay, since tax will apply just like Naira transactions.
*NEGATIVE EFFECTS ON THE CRYPTO COMMUNITY*
Increased Costs & Barriers: Small traders, freelancers, and startups will struggle to afford licenses, taxes, and compliance. This could push many out of the crypto space.
Over-Taxation: Even free or small earnings (airdrops, staking rewards, micro-trades) will be taxed, making it harder for average Nigerians trying to use crypto to survive or supplement income.
Reduced P2P Freedom: Many people rely on P2P crypto trading for livelihood. With stricter registration and SEC licensing, many informal P2P traders risk becoming "illegal operators."
Stifling Innovation: Young developers and startups building crypto solutions may find it hard to comply with heavy regulations and taxes, leading to reduced innovation in Nigeria’s blockchain space.
Wider Economic Impact: At a time when Nigerians use crypto to hedge against inflation and unstable Naira, these rules may discourage adoption and limit financial freedom.
✅ In simple terms:
From January 2026, the government wants to fully tax and regulate crypto like normal businesses. While it helps the government make money and control fraud, it makes life harder for small traders, freelancers, and ordinary Nigerians using crypto to survive. What a country?😭
