By Juliet Umeh
The Digital Assets Coalition has urged the Federal Government to review the newly introduced Guidelines on the Taxation of Virtual Assets, warning that the framework could undermine Nigeria’s estimated $92 billion digital assets market and weaken its position as Sub-Saharan Africa’s leading cryptocurrency economy.
The coalition, an alliance of digital asset operators and stakeholders in Nigeria, made the call on Thursday during the presentation of its position paper titled, “Tax the Profit, Not the Movement of Money,” at a press conference in Lagos.
While supporting the taxation of virtual assets, the group argued that the current framework focuses on taxing the movement of money rather than actual profits, a development it said could discourage innovation, drive transactions to offshore platforms and ultimately reduce government revenue.
Speaking at the briefing, spokesperson of the coalition, Obinna Iwuno, said the industry was not opposed to taxation but sought a system that was fair, practical and consistent with global best practices.
“We support the taxation of virtual assets without qualification. Our concern is with a design choice that taxes the movement of money itself.
“This charge falls on a remittance to a student abroad, on a freelancer converting earnings already taxed as income, and on a trader in a year they lost money. That is not a tax on profit. It is a toll on participation,” he said.
Iwuno said Nigeria’s virtual assets market, estimated at $92 billion, had become an important platform for cross-border payments, freelance earnings, family remittances and savings, particularly among young Nigerians.
He warned that the guidelines, which took effect on August 3, 2026, could reverse the progress recorded in the sector if not reviewed.
The coalition identified key concerns with the new framework, including the 1.5 per cent stamp duty imposed on every conversion between the naira and digital assets regardless of profitability, the one per cent withholding tax deducted from the total value of every digital asset sale even where investors incur losses, and the requirement for tax remittance in digital tokens rather than naira.
Iwuno said the coalition supported regulatory measures such as registration of digital asset platforms, customer verification and transaction reporting, but insisted that taxation should be based only on realised gains.
He also argued that the policy could disproportionately affect young Nigerians, who constitute a significant portion of digital asset users.
“The framework is anti-youth in effect, even if not in intent. You cannot tax your way into the future by taxing the people building it,” he said.
The coalition warned that the new rules could push users to foreign platforms outside the reach of Nigerian regulators, thereby reducing compliance and tax revenue.
Citing experiences from other countries, Iwuno said India’s one per cent transaction withholding tax reportedly contributed to a decline in trading volumes on regulated exchanges, while Kenya repealed its three per cent transaction tax in 2025 following concerns over its impact on innovation and market growth.
The coalition therefore called on the Nigeria Revenue Service to suspend implementation of the guidelines and begin wider consultations with industry stakeholders.
It recommended the adoption of a profit-based tax model, payment of taxes in naira, exemptions for low-value transactions, retention of registration and reporting requirements, and ensuring that tax rates are approved by the National Assembly.
“This is not a fight against taxation. It is a request for a design that works for citizens and the Revenue Service alike.
“If the framework is properly designed, government can improve compliance, protect innovation, retain investment and grow revenue,” Iwuno said.
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