PricewaterhouseCoopers (PwC) has identified six categories of virtual assets under Nigeria’s new tax framework, with the classification determining the taxes applicable to cryptocurrencies, stablecoins, security tokens, utility tokens, non-fungible tokens (NFTs) and sovereign digital currencies.
PwC disclosed this in a tax alert titled ‘Taxing the Intangible: A Critical Analysis of the NRS Guidelines on Taxation of Virtual Assets,’ following the publication of the Nigeria Revenue Service (NRS) Information Circular No. 2026/21, ‘Guidelines on the Taxation of Virtual Assets,’ on July 31, 2026.
The advisory firm said the guidelines represent Nigeria’s first comprehensive administrative framework for taxing virtual assets, coming amid the growing importance of digital assets in the Nigerian economy.
According to PwC, Category 1 covers cryptocurrencies and exchange tokens such as Bitcoin, Ether and Solana, which function as mediums of exchange or stores of value. Gains from their disposal are subject to income tax, while eligible transfers attract stamp duty..
Category 2 covers stablecoins and payment tokens, including USDT. These are similarly taxable, although stablecoins that generate yield are treated under Category 4 in respect of the yield component.
Security and investment tokens regulated under the Investments and Securities Act 2025 fall under Category 3. PwC noted that the capital gains exemption under Section 184(h) of the Nigeria Tax Act applies specifically to tokenised Nigerian stocks and shares. Category 4 comprises utility and governance tokens, including assets that generate staking rewards, decentralised finance (DeFi) yields and liquidity rewards.
NFTs constitute Category 5, with their tax treatment depending on their economic substance and whether the holder is a creator, investor or trader.
Meanwhile, Category 6 covers sovereign digital currencies, including the eNaira and foreign central bank digital currencies (CBDCs). These are excluded from the virtual asset tax framework and are treated in the same manner as fiat currency.
PwC said the guidelines provide that a single virtual asset transaction could trigger multiple tax liabilities depending on the occurrence of specific taxable events.
Income tax applies to individuals at progressive rates and to companies, generally at 30 percent for companies other than small companies, on gains from disposal and income received through virtual assets. Such income includes employment income, professional fees, mining and staking rewards, DeFi rewards and airdrops.
The guidelines also introduce a one percent withholding tax on gross disposal proceeds for Category 1, 3 and 5 assets, to be collected by Virtual Asset Service Providers (VASPs). Passive income from staking, mining, airdrops and DeFi yields attracts withholding tax of 10 percent, while professional fees attract five percent or 10 percent, depending on the applicable category.
On Value Added Tax (VAT), PwC said taxable services connected with virtual asset transactions, including exchange fees, brokerage commissions, custody and advisory services, are subject to VAT at 7.5 percent. However, the transfer of ownership of a virtual asset does not, by itself, constitute a taxable supply.
The guidelines also impose a 1.5 percent stamp duty on eligible token-to-fiat and fiat-to-token transfers, with VASPs required to deduct the duty in token units from tokens credited to customers.
PwC described the dollar-referenced methodology for calculating taxable gains as one of the most technically significant provisions. Under the approach, gains are calculated using the US dollar value of an asset at acquisition and disposal, after which the resulting dollar gain is converted to naira using the Central Bank of Nigeria/Nigerian Autonomous Foreign Exchange Market rate applicable on the disposal date.
The firm said the methodology prevents taxpayers from being taxed on ‘phantom gains’ arising solely from naira depreciation.
The guidelines also provide safe harbours for several activities. Merely holding a virtual asset does not trigger taxation, while transfers between wallets owned by the same individual are not treated as disposals. Staking lock-ups, NFT minting, certain tokenisation activities, collateralised loans, wrapping and unwrapping tokens, and deposits into DeFi protocols in exchange for receipt tokens are also treated as non-taxable events.
However, PwC raised concerns about the extensive responsibilities placed on VASPs, which are required to deduct withholding tax, collect stamp duty, enforce Tax Identification Number requirements, maintain records and file returns.
It noted that failure by VASPs or peer-to-peer marketplaces to comply attracts a penalty of N10 million for the first month and N1 million for each subsequent month of default. Failure to deduct tax at source attracts a penalty of 40 percent of the amount not deducted, while failure to remit tax deducted attracts 10 percent per annum plus interest at the Central Bank’s Monetary Policy Rate.
PwC also highlighted unresolved questions surrounding the guidelines, including whether the NRS has the legal authority to impose withholding tax beyond the WHT Regulations 2024 and the enforcement challenge posed by off-platform peer-to-peer transactions.
The firm advised taxpayers involved in virtual asset activities to register for tax and obtain a Tax Identification Number, while VASPs should urgently review their systems to ensure they can calculate, withhold and remit taxes in token units.
It further advised taxpayers to adopt either the First-In, First-Out (FIFO) or Weighted Average Cost method for determining cost bases from the outset and maintain records for at least six years.
PwC concluded that, despite implementation challenges and areas requiring further clarification, the guidelines provide a workable baseline for virtual asset tax compliance in Nigeria.