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Nigerian govt issues guidelines on taxation of cryptocurrency, virtual assets, imposes penalties
The Nigeria Revenue Service (NRS) has issued new guidelines on the taxation of virtual assets, providing a framework for the handling of cryptocurrencies and other digital asset transactions in the country.
In a statement on Monday, the tax authority said the guidelines are targeted at taxpayers, Virtual Asset Service Providers (VASPs), peer-to-peer (P2P) marketplace operators, tax practitioners and other participants in the virtual asset ecosystem.
The introduction of the virtual assets guidelines came after President Bola Tinubu signed the Presidential Executive Order on Virtual Assets Coordination, 2026, to harmonise digital asset regulation and curb financial fraud on 17 July.
According to NRS, the guidelines establish a clear administrative framework for the taxation of virtual assets in Nigeria.
The agency said the document outlines tax obligations applicable to virtual asset transactions, including registration, reporting and record-keeping requirements, valuation principles, and the tax treatment of digital asset transactions.
It noted that the provisions are in line with the Nigeria Tax Act, 2025, and the Nigeria Tax Administration Act, 2025.
NRS said the issuance of the guidelines forms part of its efforts to provide greater clarity, certainty and consistency in the administration of Nigeria’s tax laws as the country’s virtual asset ecosystem continues to evolve.
According to the agency, the framework is designed to promote voluntary tax compliance, improve transparency, and support the development of a fair and efficient tax system for digital asset transactions.
The tax authority urged all affected taxpayers and stakeholders to study the guidelines and ensure full compliance with their tax obligations.
Penalties
Under the guidelines, VASPs and P2P marketplace operators that fail to meet their obligations face an administrative penalty of N10 million for the first month of default and N1 million for each subsequent month until compliance is achieved.
The obligations include deducting taxes from taxable transactions, collecting stamp duties where applicable, accounting for value-added tax (VAT), remitting taxes to the NRS within stipulated timelines, filing statutory returns, and maintaining proper books and records.
The guidelines also prescribe other sanctions, including N100,000 for failure to file returns or for filing incomplete returns in the first month of default, N50,000 for each subsequent month, and a penalty equal to 40 per cent of tax not deducted at source.
According to the guidelines, failure to register attracts N50,000 in the first month and N25,000 for each subsequent month, while failure to keep books and records attracts a N50,000 penalty for a company and N10,000 for an individual.
Also, failure to attend to demands, requests or notices attracts N100,000 for the first day and N10,000 for each subsequent day of default, while failure to disclose facts in a dutiable instrument attracts a N100,000 administrative penalty, a fine of N50,000 upon conviction, imprisonment for a term not exceeding three years, or both a fine and imprisonment.
The tax regulator also said that failure to notify a change of address attracts N100,000 for the first month and N50,000 for each subsequent month of default.
It added that failure to remit tax deducted at source attracts a penalty of 10 per cent per annum, plus interest calculated at the CBN’s Monetary Policy Rate (MPR), in addition to the amount deducted but not remitted, while a false or fictitious VAT refund claim attracts a penalty of 100 per cent of the amount claimed, plus interest calculated at the CBN’s Monetary Policy Rate.
According to the NRS, non-payment of tax for naira transactions attracts a penalty of 10 per cent of the amount due, plus interest, while non-payment of tax for foreign currency transactions attracts a penalty of 10 per cent of the amount due, plus secured overnight financing rate (SOFR) and the applicable spread.
“The penalties set out in this paragraph apply to the defaults relating to compliance with these guidelines and are without prejudice to the application of any other penalty, interest or offence prescribed under the NTAA or any other applicable law,” the guidelines stated.
The NRS also classified virtual assets into three broad categories, each with different tax treatments. These include cryptocurrencies and exchange tokens; fiat-referenced stablecoins; and virtual assets representing financial or investment rights, such as profit-sharing or revenue-sharing tokens.
Special crypto rules
For stablecoins, the NRS said gains will be determined based on the underlying fiat currency, while no withholding tax will apply at the point of disposal.
Cross-border transactions involving the conversion of naira into virtual assets for international settlements will not be treated as taxable disposals. However, any subsequent disposal of those assets will attract the applicable taxes.
The agency further clarified that virtual assets received as salaries, wages or professional fees will be valued at their fair market value on the date of receipt and taxed under the relevant provisions of the Nigeria Tax Act.
Similarly, tokens received from staking, mining, decentralised finance (DeFi) rewards and liquidity incentives will constitute taxable income on the date they are received, with the recognised value becoming the acquisition cost for future disposals.
READ ALSO: Tax ombud, experts seek fairer, transparent tax system to boost compliance
For non-fungible tokens, the NRS said income earned by creators from the sale of NFTs will be treated as business income, while gains realised by investors disposing of NFTs held as investments will be taxed in accordance with the virtual asset guidelines.
The NRS said the new framework is intended to provide certainty for taxpayers while improving compliance and ensuring that Nigeria’s rapidly growing virtual asset ecosystem is brought within the country’s tax net.
The guidelines represent the latest effort by NRS to strengthen tax administration and expand revenue collection following the implementation of the Nigeria Tax Act, 2025, and the Nigeria Tax Administration Act, 2025.
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The Auditor-General of the Federation flagged an alleged ₦345.5 million duplicate payment by the Federal Ministry of Communications, Innovation, and Digital Economy to a contractor handling the Abuja ICT Park project.
The finding was contained in the Auditor-General’s Annual Report on Non-Compliance and Internal Control Weaknesses in Ministries, Departments and Agencies of the Federal Government for the year ended 31 December 2024.
The special audit of the communication ministry covered the period from 1 January to 31 December 2021 and raised 14 issues concerning the planning, funding, procurement and implementation of the ICT Park project.
At the time the project was being implemented, Isa Ali Pantami, who was appointed by former President Muhammadu Buhari, served as Minister of Communications and Digital Economy from 2019 to 2023. He was succeeded by Bosun Tijani, who was appointed by President Bola Tinubu.
₦345.5 million duplicate payment
In Issue 13 of the findings, titled “Loss of Fund Due to Duplicated Payments to Contractor,” the Auditor-General said the ministry processed and approved two separate payments of ₦345,499,262.74 each as the third tranche of the 15 per cent mobilisation advance to the contractor.
The payment was intended to establish the Information and Communication Technology (ICT) Park, Abuja.
The Permanent Secretary approved the first payment on 19 January 2022 through payment voucher No. FMCDE/CAP/606/2021 dated 24 January 2022.
The same accounting officer approved the second payment on 17 January 2023 through payment voucher No. FMCDE/CAP/149/2022 dated 8 February 2023.
The report said the two paid vouchers had identical contract references, amounts, and narrative descriptions, which it said indicated duplicate payment.
It added that no record showed the first payment had been reversed, adjusted, or treated as an accounting error.
“There was also no journal entry, refund, or internal memo linking the 2023 approval to any prior transactions. These omissions demonstrate a failure of supervisory review, record reconciliation, and payment verification within the Ministry,” the findings stated.
The Finance and Accounts Department also failed to justify the repeated authorisation or the lack of reconciliation between the Cash Book and Vote Book, according to the report.
The findings said the contractor, while claiming it received only one payment in 2023, submitted a bank statement that excluded the critical period between 2 January 2022 and 8 February 2023, preventing independent verification of its claim.
The audit said the payments posed risks of fund diversion and loss of public funds, attributing this to weaknesses in the ministry’s internal control system.
The audit said the ministry’s management did not respond to the alleged duplicate payment under the contract.
The Auditor-General recommended that ₦345.499 million be recovered and remitted to the Treasury, and that evidence of remittance be forwarded to the Public Accounts Committee of the National Assembly.
₦447.67m from undisclosed funding sources
In Issue 11, the auditors questioned ₦447.67 million in payments to the ICT Park contractor, which they said could not be traced to the Government Integrated Financial Management Information System (GIFMIS).
The amount comprised ₦102,166,730 and ₦345,499,262.74 paid to the contractor, vide paid vouchers, Ref. No. FMCDE/CAP/061/2021 and FCMDE/606/2022 on 11 June 2021 and 19 February 2022, respectively.
According to the report, the payments appeared in the cash book. The contractor acknowledged them in the progress report and bank statement, but they did not appear in GIFMIS records, indicating they were processed off the system.
The audit said officials in the ministry’s Finance and Accounts Department could not explain the existence or authorisation of the alternative funding sources.
The report said the ministry also failed to provide documentation showing lawful appropriation, supplementary approval, or an external funding agreement for the payments.
The audit said the action posed a risk of misappropriation of funds and diversion of public property.
It said the ministry’s management did not respond to questions about the history of the payments in the GIFMIS records.
The Auditor-General recommended recovering and remitting ₦447.67 million to the Treasury, with sanctions under paragraphs 3106 and 3129 of the Financial Regulations (2009) if the ministry fails to comply.
₦396.65 million project funds used for unrelated items
In Issue 9, the findings showed that N396.65 million from the ICT Park project fund was used to pay for consultancy services, office consumables, furniture, and stationery printing.
The audit said approvals had been processed for consultancy services relating to the ICT Park. Still, payments were made to unrelated suppliers for consumables and office furniture that were not contained in the project’s Bill of Quantities.
The report said this reduced funds meant for the mobilisation and execution of the ICT Park project.
It also said the ministry failed to provide evidence of approval for the virement from the Minister of Finance, Budget and National Planning and the National Assembly.
It said the actions posed a risk of misappropriation of funds and undue delay in completion of the project, noting that the ministry failed to respond to the question on the use of the project funds for unrelated items.
The Auditor-General recommended recovering and remitting ₦396.655 million to the Treasury, with sanctions under paragraphs 3106 and 3129 of the Financial Regulations (2009) if the ministry fails to comply.
₦1.85bn paid without performance bond
In Issue 10, the auditors also found that N1.848 billion was paid to the contractor without securing a valid Performance Bond.
The report said the Bureau of Public Procurement had directed in December 2020 that a minimum 10 per cent Performance Bond be secured for major contracts before payment of mobilisation fees.
However, the ministry first released ₦1.348 billion in mobilisation payments between March 2021 and February 2023 without obtaining the required bond.
The report said that nearly three years after the contract award, the contractor submitted a commitment letter dated 29 December 2023, promising to furnish a Performance Bond upon receiving an additional N500 million. This amounts to ₦1.848 billion.
It said the actions exposed public funds to loss, noting that the ministry failed to respond to the question on the payment.
The Auditor-General recommended recovering and remitting ₦1.848 billion to the Treasury, and imposing sanctions under paragraphs 3106 and 3129 of the Financial Regulations (2009) if the ministry fails to comply.
₦500 million paid without interim performance certificate
In Issue 12, the Auditor-General said the ministry released an additional ₦500 million to the contractor on 29 December 2023 without an Interim Performance Certificate or verified progress report.
The report said the payment was made after the contractor received the 15 per cent mobilisation fee.
Instead of an Interim Performance Certificate, the ministry relied on a commitment letter from the contractor promising to provide project vehicles and undertake overseas technical trips upon receipt of the additional funds.
The audit said the actions posed a risk of diverting public funds and losing government funds. It said that the ministry failed to respond to the question on the payment.
The Auditor-General recommended recovering and remitting N500 million to the Treasury and imposing sanctions under paragraph 3106 of the Financial Regulations (2009) if the ministry fails to comply.
Premature foreign trips of ₦90 million
In Issue 8, the auditors questioned a ₦90 million provisional sum for foreign trips to inspect technical equipment for the ICT Park.
According to the findings, the sum of ₦90 million was included and described as “Allow a provisional sum of N90 million to cater for Client’s and Consultants’ representatives for foreign trips for the inspection of technical equipment to be deployed for the project,” in the priced Bill of Quantities (BOQ) for the contract for the ICT Park project, with a contract sum of ₦8.984 billion.
The report said the expenditure was being planned while the project was still at foundation level, before structural works, equipment procurement or installation had commenced.
It said no evidence was provided to justify the technical need, approved schedule, or cost-benefit assessment supporting the timing of the proposed trips.
The audit said the action demonstrated weak expenditure prioritisation and poor sequencing of project activities, noting that it posed a risk of undue delay in completion of the project and diversion of public funds.
Again, the ministry did not respond to questions about the premature foreign trip.
The Auditor-General recommended recovering and remitting the N90 million. It also recommended sanctions under paragraphs 3106 and 3115 of the Financial Regulations (2009) if the ministry fails to comply.
Denial of access to project documents
The audit also raised concerns about the ministry’s failure to give auditors access to project documents.
In Issue 14, the report said auditors were denied access to documents including needs assessment reports, bank mandates for ICT project payments, payment vouchers, due diligence reports on the contractor and the Environmental and Social Impact Assessment report.
READ ALSO: How Nigeria’s Population Commission mismanaged N245 billion on undelivered products, other controversial contracts – Auditor-General
The report said several requests for project-related documents made between March and June 2025 were not answered by the ministry.
It said the denial of access to procurement documents contravened the Constitution and risked concealing financial information, diverting government revenue, and the loss of public funds.
The Auditor-General asked the Permanent Secretary to justify the denial of access and produce all documents relating to the ICT Park project.
The report stated that the ministry did not respond to the issues raised in the audit and that the findings remained valid until the recommendations were implemented.
Other issues
Other issues included a ₦94.05 million cost overrun attributed to the failure to conduct feasibility studies and an Environmental Impact Assessment before the ICT Park project began.
The Auditor-General also flagged ₦19.47 million in costs linked to delayed site handover, while questioning the absence of resident technical supervision despite a ₦160 million provision for it.
The report further cited inadequate budgetary provisions that contributed to project delays and the ministry’s failure to conduct or document a needs assessment before procurement.
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