PwC warns new crypto tax rules could hurt $92bn market

Nigeria’s new tax rules for virtual assets could increase compliance costs and create uncertainty for businesses and investors in a digital-asset market estimated at $92 billion, PwC Nigeria has warned, as the professional services firm identified several unresolved legal and practical issues in the framework.

The concerns were raised in a tax alert titled “Taxing the Intangible: A Critical Analysis of the NRS Guidelines on Taxation of Virtual Assets,” following the release of the Nigeria Revenue Service’s (NRS) Guidelines on the Taxation of Virtual Assets on July 31, 2026.

The guidelines provide the first comprehensive administrative framework for taxing virtual assets in Nigeria and seek to clarify how digital assets should be treated for tax purposes.

PwC, however, said several provisions could create uncertainty for taxpayers, virtual asset service providers (VASPs) and businesses operating in the sector.

One of the key issues concerns the treatment of transfers between wallets controlled by the same person.

The guidelines provide that the movement of virtual assets between wallets owned by the same individual does not constitute a taxable disposal. PwC noted, however, that the exemption applies only to individuals and excludes companies and partnerships.

The firm said this could create difficulties for corporate treasury operations where businesses transfer digital assets between multiple wallets that they own.

PwC also questioned the requirement for taxpayers to obtain virtual asset prices from an “aggregator approved by the Service”, noting that the NRS has not yet published a list of approved aggregators.

The absence of such a list, according to the firm, could make it difficult for taxpayers and VASPs to determine the appropriate value of assets for tax calculations and reporting.

Another concern is the interaction between withholding tax and income tax.

Under the guidelines, VASPs are required to withhold 1 per cent of gross disposal proceeds on certain virtual-asset transactions, while income tax is also imposed on gains arising from disposals.

PwC warned that the interaction between tax deducted from gross proceeds and tax calculated on net gains would require careful reconciliation to prevent taxpayers from being effectively over-taxed.

“The interaction between the WHT on gross proceeds and the income tax on net gains will require careful reconciliation on annual returns to avoid over-taxation,” PwC said.

The guidelines also place significant administrative responsibilities on VASPs, including withholding taxes, collecting stamp duties, enforcing Tax Identification Number requirements before account activation, filing returns and maintaining transaction records.

Non-compliance attracts a N10 million penalty for the first month, followed by N1 million for each subsequent month.

PwC questioned the basis for placing these obligations on VASPs when similar requirements do not apply in the same form to bureaux de change and stock exchanges.

The firm also questioned whether the NRS has the legal authority to impose withholding-tax obligations beyond those provided for under the Withholding Tax Regulations 2024.

The concerns come as the Nigerian digital-asset industry continues to expand and increasingly serves as a channel for international payments, remittances, savings and income generation.

The Digital Assets Coalition, an industry stakeholder group, has estimated Nigeria’s virtual-asset economy at $92 billion and warned that the new tax regime could reduce investment and slow the sector’s growth.

The group said the market has become an important part of Nigeria’s emerging digital economy and argued that the regulatory framework should provide clarity without imposing costs that discourage innovation and investment.

The tax guidelines were introduced shortly after President Bola Ahmed Tinubu signed the Presidential Executive Order on Virtual Assets Coordination 2026, establishing a more coordinated framework covering cryptocurrencies, stablecoins, tokenised assets and other digital financial products.

For the government, the new framework is intended to improve tax compliance and bring a rapidly growing digital economy into the formal tax system.

For operators and investors, however, the key issue will be whether the new obligations create a predictable tax environment or add sufficient uncertainty and compliance costs to discourage activity.

The scale of the sector means the outcome has wider economic implications. A market valued at $92 billion represents a significant pool of capital and financial activity, particularly for younger Nigerians and businesses using digital assets for cross-border transactions.

The immediate challenge for the NRS will therefore be to resolve the ambiguities identified by PwC while ensuring that taxation of virtual assets does not undermine the investment, innovation and financial activity the government is seeking to capture.

For Nigeria, the effectiveness of the new regime will ultimately be measured not only by the tax revenue generated but also by whether the country can regulate a fast-growing digital economy without driving legitimate businesses and investment elsewhere.