PwC flags tax traps in Nigeria’s new virtual assets guidelines

PwC Nigeria has raised concerns over ambiguities in the Nigeria Revenue Service's recently released guidelines on the taxation of virtual assets. In a tax alert, the firm urged taxpayers to prepare for implementation, noting that the guidelines offer more clarity on digital asset taxation but leave several questions unanswered. The Nigeria Revenue Service published the Information Circular No. 2026/21, titled “Guidelines on the Taxation of Virtual Assets,” on July 31, 2026. This marks the first comprehensive framework for taxing virtual assets in Nigeria.

PwC identified two main issues. First, the guidelines create uncertainty regarding transfers between wallets owned by the same person, stating that such transfers do not constitute a taxable disposal. However, the guidelines depend on an unannounced list of approved aggregators, potentially causing confusion for taxpayers and Virtual Asset Service Providers (VASPs) in valuing assets for tax purposes.

Second, PwC questioned the interaction between a 1% withholding tax on gross disposal proceeds and income tax on net gains. VASPs must withhold 1% of the gross disposal proceeds for certain virtual assets, while income tax also applies to gains from disposal. The firm also raised questions about the Nigeria Revenue Service's authority to impose withholding tax obligations outside the Withholding Tax Regulations 2024.

These concerns come as the new guidelines have sparked debate among cryptocurrency investors, traders, and industry stakeholders, with some warning that excessive taxation could stifle innovation, while others appreciate the framework's clarity. The guidelines followed President Bola Tinubu's signing of the Presidential Executive Order on Virtual Assets Coordination, 2026, which established a coordinated regulatory framework for cryptocurrencies, stablecoins, tokenized assets, and other digital financial products.

However, a coalition representing digital asset stakeholders in Nigeria has warned that the new tax rules could deter investment and slow down the expansion of Nigeria's virtual asset economy, which is valued at $92 billion and is the largest in Sub-Saharan Africa.