Nigeria’s crypto tax push hinges on enforcement muscle

Nigeria’s push to tax cryptocurrency transactions now requires exchanges to log customer trades daily into a government e-reporting portal, a policy that took effect in January 2026. However, industry executives say enforcement gaps and regulatory uncertainty could undermine the effort.

The new system, overseen by the Nigeria Revenue Service (NRS), the country’s tax authority, requires digital asset exchanges to upload transaction data into a centralised platform designed to calculate applicable taxes. The move is part of a broader revenue drive as Nigeria seeks to expand its tax base and finance widening budget deficits.

The crypto sector remains largely unlicenced, and questions persist over how authorities will enforce compliance, especially against offshore platforms serving Nigerian users.

Nigeria is attempting to formalise and tax one of the world’s most active crypto markets through a new e-invoicing regime. But with no fully licenced exchanges, sandbox approvals stuck in limbo, and offshore competitors operating beyond domestic reach, the success of the tax push will depend less on policy design and more on whether regulators can build credible enforcement means.

Ayotunde Alabi, country manager and Chief Executive Officer (CEO) of Luno Nigeria, a UK-born cryptocurrency firm operating in the country, confirmed that crypto startups are required to track and monitor customer transactions and upload on the NRS portal. Luno Nigeria currently uploads these transaction logs daily, according to Alabi.

“There is a portal where [crypto exchanges] can upload all [customer] transactions into the NRS system; that’s where things stand at the moment,” said Alabi. “There’s still confusion about how this will be implemented. When you narrow it down to cryptocurrency or digital asset exchanges and their customers, it becomes even cloudier, because it isn’t clear what each party should be doing right now.”

Crypto startups remain unclear about how different cases will be treated or how taxes will be calculated and remitted to the tax authority on the e-reporting portal.

“From an individual perspective, however, it’s still not clear whether the e-invoicing system is sufficient,” said Alabi. “For example, it doesn’t address people running side businesses above the tax-exempt threshold. What happens in those cases? There’s also no clarity on how gains and losses will be treated.”

Crypto exchanges are now working with auditors, including PwC and KPMG, to understand how to automate reporting into the government’s system, according to Alabi.

Implementation remains uneven among local crypto startups, with no formal deadline publicly announced as startups continue to familiarise themselves with the new reporting system. Chimene Chinah, CEO of Dantown, a Nigerian crypto startup, said it has yet to begin reporting transactions to the NRS.

“We [Dantown] haven’t started yet because we are trying to regularise user data to get their Unique Tax identifiers, including National Identification Number (NIN) and Corporate Affairs Commission (CAC) registration numbers [for merchants] as proposed by the NRS,” said Chinah.

Enforcement questions

While the reporting obligation is clear, the broader regulatory framework is not.

No crypto exchange has received a full operating licence in Nigeria. The Securities and Exchange Commission (SEC) has admitted some firms into a regulatory sandbox and granted approvals in principle to Quidax and Busha, two Nigerian crypto exchanges, but full licencing remains pending. 

That creates a practical problem. The tax rules contemplate penalties, including fines or licence revocation for non-compliance. But without formal licences, it is unclear what authorities would revoke.

The lack of enforcement clarity could create uneven competition. If locally-compliant exchanges implement tax deductions while offshore platforms do not, customers may simply migrate.

“It becomes a disadvantage for compliant exchanges,” said Alabi. “Customers will move to exchanges that don’t enforce it.”

Several foreign crypto platforms operate in Nigeria without local offices, including Bitget and Bybit, yet continue onboarding Nigerian users. 

Bitget did not immediately respond to a request for comment on its status of transaction logging on the NRS e-portal.

Bybit couldn’t be reached for comment.

Revenue imperative

The government’s objective is straightforward: raise revenue as the country targets to build a $1 trillion economy by 2030.

Like many emerging markets, Nigeria faces fiscal pressure and has widened its tax net across banking, fintech, and digital services. The new crypto reporting regime sits alongside broader financial transaction monitoring tied to Tax Identification Numbers (TINs).

In theory, centralised logging of trades could allow authorities to calculate gains and apply capital or transaction taxes. In practice, industry participants say questions remain unresolved, including how individual investors will file, how losses will be treated, and how informal activity, such as peer-to-peer (P2P) trading, outside regulated platforms will be captured.

“A huge chunk of crypto exchange providers run [over-the-counter] OTC desks via WhatsApp and other chat services with millions in USD processed daily, so that can be tricky to monitor,” said Chinah. “The focus will still be on local players, and it will only lead to churn of active users to foreign players who may not comply.”

The NRS did not immediately respond to questions around P2P transaction monitoring on the e-portal, or how many crypto startups, both local and foreign, are now compliant.

Nigeria’s cryptocurrency market is one of the largest globally by adoption. The country has seen sustained retail participation in digital assets, even amid regulatory crackdowns and banking restrictions.

That scale makes the sector an attractive target for revenue mobilisation, but also a difficult one to police.

The structure of the market compounds the challenge.

Crypto exchanges can operate without physical infrastructure in-country. Websites can shift domains. Users can access platforms through virtual private networks (VPNs), and switching costs are low.

Without coordinated licencing, monitoring, and tax enforcement, compliant operators could lose market share to competitors that opt out of reporting obligations.

For now, crypto startups say they intend to comply as rules become clearer. But executives stress that policy credibility will hinge on consistent application across the sector.