…Wants revenue agency to enforce 10% tax

The International Monetary Fund wants the Federal Inland Revenue Service (FIRS) to enforce Nigeria’s 10 percent tax on gains from the sale of digital assets, including cryptocurrencies.

The tax, introduced under the Finance Act of 2023, applies to any profit from disposing of crypto assets. But so far, the FIRS has not begun collecting it, largely because it lacks a system to track crypto ownership and usage, and relies on self-reporting, which the IMF describes as ineffective.

To close this gap, the IMF has advised the FIRS to collaborate with major crypto intermediaries, mandate tax withholding on capital gains, and work with international bodies to identify tax defaulters, especially those using offshore exchanges.

“This will require collaboration with major crypto intermediaries to identify individuals and firms engaged in crypto trading and ensure proper tax collection.

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“The authorities could also consider mandating firms to withhold taxes on capital gains. Additionally, the FIRS should enhance cooperation with international agencies to identify and penalise tax defaulters, as many traders use offshore exchanges, making tax collection even more challenging,” it said in a new paper titled, ‘Regulating the Crypto Market in Nigeria.’

After years of regulatory caution despite the rise of crypto trading among individuals and businesses in the country, authorities are strengthening the regulatory and supervisory framework for crypto assets to address potential risks, including undetected capital outflows, currency speculation, money laundering, terrorism financing, and consumer fraud.

According to Chainalysis, India, Nigeria, and Indonesia rank as the top three countries in crypto adoption, and Nigeria recorded a volume of $59 billion in crypto transaction volume between July 2023 to June 2024. This has prompted the federal government to begin paying attention.

In early 2024, the government began drafting an executive bill to overhaul revenue administration, including crypto regulation.

“We cannot run away from the cryptocurrency ecosystem because it is the in-thing. But as it stands in Nigeria today, there is no law that regulates cryptocurrency operations,” said Zacch Adedeji, chairman of the FIRS.

The crypto regulation aims to boost the country’s revenue as it moves away from reliance on oil income. This change came after crypto operators started imposing a 7.5 percent VAT on all transaction fees within the country.

On March 29, 2025, President Bola Tinubu signed the Investment and Securities Act (2025) into law, legalising crypto assets and recognising them as virtual assets. Before this (2024), crypto exchanges were already required to register locally and obtain licenses from the Securities and Exchange Commission (SEC).

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While the ISA is now operational, the IMF believes that it must be enforced to ensure its effectiveness. “The authorities need to continue shutting down the operations of unlicensed exchanges operating in Nigeria in collaboration with foreign authorities,” it said.

The IMF further noted that the surveillance of the crypto market is still in early stages in the country. Both the Central Bank of Nigeria (CBN) and SEC have created specialist crypto units and subscribed to the Chainalysis platform to track market activity. The IMF noted that data from registered exchanges and fintech firms are now being shared regularly.

An inter-agency crypto working group, comprising SEC, the Central Bank of Nigeria, the Financial Intelligence Unit, and the Office of the National Security Adviser, meets regularly to coordinate efforts.

“The working group meets on a regular basis, sharing information and discussing progress on their policy initiatives,” it stated.

However, the IMF argued that authorities must develop and apply a formal monitoring framework that is comprehensive and covers a wide range of risks, including money laundering, terrorism financing, consumer fraud, tax evasion, and other relevant risks.