Crypto tax is stirring worry among Nigeria’s traders, who may flee to peer-to-peer (P2P) platforms.
Starting January 2026, the NTAA will require VASPs to register and comply with strict rules.
They must retain KYC records for seven years and report suspicious or large transactions immediately.
Crypto Tax Sparks Trader Worry
Moreover, the NTAA penalises non-compliance with ₦10 million for the first month and ₦1 million for each following month.
In addition, the SEC can suspend or revoke licences if firms fail to meet requirements.
The Act also taxes all crypto transactions, including sales, exchanges, mining, staking, or rewards.
Furthermore, payments for goods and services made in crypto will receive the same tax treatment as cash.
Traders Face Heavy Compliance
Convener of Lagos Blockchain Week, Chukwuemeka Mbaebie warns that mandatory KYC, tax links, and quarterly reports will discourage small traders.
Consequently, many may abandon exchanges and move to informal P2P networks.
Similarly, President of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), Obinna Iwuno says the tax risks empowering P2P markets while weakening licensed exchanges.
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He points to the 7.5% VAT, which drove traders away from platforms like KuCoin.
Therefore, Iwuno recommends expanding licences and introducing a tiered regulatory system to allow self-policing among operators.
Currently, only Quidax and Busha hold Approval-in-Principle licences, while no exchange operates fully.
Meanwhile, the SEC delays new licences due to thorough checks and careful due diligence under ARIP.
Regulation Must Come First
Industry stakeholders argue that the government introduces the tax before establishing clear regulatory frameworks.
Without a broader licence base, enforcement becomes difficult, and traders may evade oversight.
The NTAA also taxes rewards such as airdrops, bounties, or any compensation in virtual assets.
Mbaebie highlights the heavy compliance burden, warning small traders will likely abandon formal exchanges entirely.
Similarly, Iwuno stresses that supporting industry growth with tax holidays or incentives could benefit the government.
In conclusion, stakeholders urge the government to regulate before taxing to secure the market’s long-term stability.
As compliance costs rise, Nigeria’s crypto market faces a pivotal choice: formal growth or shadow trading.
