The Nigerian government will implement a new tax regime for cryptocurrency profits, effective January 2026. Some industry experts are questioning the timing and effectiveness of the tax but others see it as a step towards recognizing crypto as a legitimate financial instrument. Tax Structure and Exemptions for Traders The Nigerian government is set to introduce a new tax regime for cryptocurrency profits, with laws taking effect in January 2026. This development, confirmed by the Presidential Fiscal Policy and Tax Reforms Committee, will subject crypto gains to personal income tax, while losses will not be recognized for tax relief. According to a local report, the new legislation focuses on realized gains from virtual assets. The tax structure, however, includes a significant tax-free threshold to protect small investors. The report quotes Taiwo Oyedele, chairman of the Presidential Fiscal Policy and Tax Reforms Committee, who said the first $545.82 (₦800,000) of any annual net profit from crypto trading will be entirely tax-free. Any profit exceeding that threshold will be taxed at 15%. Significantly, the law states that if a trader sells a virtual asset at a loss—for example, buying at $2,000 and selling for $1,500—they would owe zero tax, as the law currently ignores losses. “If your net gain is small, below the threshold ($545.82), your tax is 0%,” Oyedele confirmed. “It is not a crime to invest in crypto.” Under the new framework, the responsibility of compliance lies on both the individual trader and the virtual asset service providers (VASPs). The law also requires crypto exchanges to actively monitor and report customer transactions, including the exchange, sale or transfer of virtual assets, to the tax authority. They must also report large or suspicious transactions to the tax authorities and the Nigerian Financial Intelligence Unit (NFIU). Penalties and Regulatory Confidence Failure to comply will result in severe penalties for operators, including a fine of $6,693 in the first month and $669 for every subsequent month. Non-compliant operators also risk license suspension or revocation by the Nigerian Securities and Exchange Commission (SEC). Oyedele expressed confidence in the new structure, stating, “We think that the regime we have now for virtual assets, including crypto, is fair, is balanced, and is globally competitive.” Reaction to the announcement has been mixed, with some key players in the Nigerian crypto industry questioning the wisdom of proceeding to tax crypto transactions when there is still a lack of clarity on the government’s stance on digital assets. Rume Ophi, a crypto market analyst, described the move as a mistake and added that it makes the government “look desperate.” “I am of the opinion that the government is making another mistake like it did in 2021 by banning cryptocurrency transactions from the banks. That scare is still there,” Ophi said. Like fellow experts, Ophi, the former executive secretary of Stakeholders in Blockchain Technology Association of Nigeria (SIBAN), also questioned why authorities expect crypto trading residents to pay taxes when it has blocked most of the crypto platforms they use. However, some, like Benjamin Eseoghene, founder and CEO of Roqqu, have hailed the move, which they see as a step toward the recognition of crypto as a proper financial instrument. He added: “And with every financial instrument that behaves like crypto does, it is subject to taxes, so this is just the natural progression of the regulation we’ve all been asking for so long now.” Meanwhile, Ophi urged the Nigerian government to follow in the footsteps of the Trump administration, which has accommodated the crypto industry. To help build a similar rapport with the local industry, Ophi urged the Nigerian government to appoint an adviser on crypto, blockchain and Web3.