Nigeria Enacts Crypto Tax Law Mandating Identity-Linked Transactions

TLDR:

• Nigeria virtual asset providers must collect TIN and NIN from all customers under new Nigerian tax law.
• Monthly transaction reports to tax authorities become mandatory for crypto platforms starting 2025.
• Non-compliant providers face 100,000 naira fines initially, plus 10,000 naira for each month after.
• Large or suspicious crypto transactions must be reported to tax authorities and financial intelligence. 

Nigeria has enacted a crypto tax law mandating identity-linked transactions through Tax Identification Numbers and National Identity Numbers. 

The Nigerian Tax Administration Act 2025 requires virtual asset service providers to connect cryptocurrency transactions with verified user identities, ensuring traceability for tax purposes. 

This regulatory framework marks a significant shift in how the country monitors digital asset activities, moving from largely invisible transactions to a system where crypto movements can be tracked through formal identification protocols.

Mandatory Identity Collection Under New Framework

The new crypto tax law establishes strict identity verification requirements for all virtual asset service providers. 

According to the legal provisions, platforms must obtain “the customer’s name, address, telephone number, email address and tax identification number, and if the customer is an individual, the customer’s national identity number.” 

This requirement creates a permanent link between cryptocurrency transactions and real-world identities.

Service providers must maintain comprehensive Know Your Customer records for all users. The law mandates retention of customer transaction and identity data for at least seven years after the last completed transaction. 

This extended record-keeping period ensures authorities can conduct retrospective investigations when necessary.

Tax authorities possess broad powers to request supplementary information from virtual asset service providers with or without prior notice. 

This provision enables regulators to access detailed transaction histories and customer data whenever deemed necessary for tax administration or enforcement purposes.

Monthly Transaction Reporting Requirements

Virtual asset service providers face new monthly reporting obligations starting in 2025. These filings must include detailed information about the nature of services provided, whether exchange, sale, transfer, or escrow operations. 

Each report must document transaction dates, virtual asset types, values involved, and complete customer identification details.

The reporting mechanism extends beyond primary transaction parties. Providers must submit names, addresses, telephone numbers, and email addresses of all secondary parties involved in cryptocurrency trades. 

This comprehensive approach allows authorities to map entire transaction networks and track fund movements across multiple participants.

Large or suspicious transactions trigger additional reporting requirements to both tax authorities and the Nigerian Financial Intelligence Unit. 

This dual reporting system integrates the crypto tax law with the country’s broader anti-money laundering framework, extending regulatory oversight beyond tax collection.

Compliance Obligations and Enforcement Provisions

Cryptocurrency traders must now self-declare their profits under individual income tax categories. 

The law states that “taxpayers engaged in virtual asset activities shall keep records and account books in accordance with the provisions of Article 31 of this Law, and report virtual asset activities to the relevant tax authorities.” This provision establishes individual responsibility alongside platform compliance requirements.

The crypto tax law builds upon the Finance Act of 2022, which introduced a 10% levy on digital asset profits. However, enforcement proved difficult without mechanisms linking transactions to identifiable individuals. 

The new identity-linked framework addresses these gaps through mandatory Tax Identification Number and National Identity Number collection.

Non-compliant virtual asset service providers face escalating penalties under the enforcement provisions. Initial violations carry fines of 100,000 naira, with subsequent monthly breaches incurring additional 10,000 naira penalties. 

Beyond financial consequences, non-compliant operators risk license suspension or complete revocation. 

The crypto tax law aligns with the Investment and Securities Act 2025, which recognizes virtual assets as securities under Securities and Exchange Commission jurisdiction.

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