Sunday Ehigiator PwC Nigeria has warned of the legal uncertainties, enforcement gaps and a potentially heavy compliance burden for Virtual Asset Service Providers (VASPs) in the new tax framework for virtual assets. In its August 2026 tax alert titled, ‘Taxing the intangible: A critical analysis of the NRS guidelines on taxation of virtual assets,” PwC said the guidelines represent Nigeria’s first comprehensive administrative framework for taxing virtual assets, but cautioned that several provisions raise important legal and practical questions. The Nigeria Revenue Service (NRS), formerly the Federal Inland Revenue Service, published Information Circular No. 2026/21, “Guidelines on the Taxation of Virtual Assets,” on July 31, 2026, as Nigeria increasingly moves from restricting digital assets towards formalising the sector. However, PwC noted that the guideline, “Does not include any effective date even though it introduces some new obligations that are not in the Nigeria Tax Act (NTA) or Nigeria Tax Administration Act (NTAA).” The report said a single virtual asset transaction could generate multiple tax liabilities depending on the applicable taxable event. Income tax applies to individuals at progressive rates and to companies, other than small companies, at 30 per cent on gains from disposal. “It also applies to income and gifts received in virtual assets, including employment income, professional fees, mining rewards, staking rewards, DeFi rewards and airdrops,” it said. The guidelines additionally introduce a 1 per cent withholding tax on gross disposal proceeds for cryptocurrencies, security and investment tokens and NFTs, with VASPs responsible for collection. Passive income from staking, mining, airdrops and DeFi yield attracts 10 per cent WHT, while professional fees attract WHT at five or 10 per cent, as applicable. VAT is imposed at 7.5 per cent on taxable supplies connected with virtual asset transactions, including exchange fees, brokerage commissions, custody fees and advisory services. The transfer of ownership of a virtual asset itself, however, does not constitute a taxable supply. Where virtual assets are used to pay for taxable goods or services, VAT applies to the underlying supply as if payment had been made in fiat. The guidelines also impose 1.5 per cent stamp duty, borne by the transferee, on token-to-fiat and fiat-to-token transfers. VASPs are required to deduct the duty in token units from tokens credited and remit it to the NRS by the 15th and 30th of each month. PwC, however, raised questions over the wider implications of the stamp-duty provision, saying the NRS position could imply that transfers of goods and intangible property are subject to the 1.5 per cent levy. The firm noted, “Based on the law, if those transactions (including VAs) are N10m or less, stamp duty should not apply.” It added that this issue would need to be considered by the NRS and VASPs when configuring their systems. PwC identified the dollar-referenced methodology for calculating taxable gains as one of the most technically significant provisions of the guidelines. Under this approach, the gain is calculated using the US dollar value of the asset at acquisition and disposal, after which the resulting dollar gain is converted to naira at the CBN/NAFEM rate on the disposal date. According to PwC, “The methodology excludes the Naira depreciation component from the taxable base, ensuring that taxpayers are not taxed on phantom gains arising purely from currency movements.” The firm described the approach elsewhere in its analysis as, “A welcome and pragmatic policy choice,” arguing that taxing nominal naira gains on assets inherently denominated in dollars could produce punitive effective tax rates on genuine economic returns. PwC said losses from virtual asset disposals can only be offset against virtual asset gains and not against non-VA income. Capital losses can be carried forward indefinitely, but only against future virtual asset gains. FIFO is the default cost-base method, although taxpayers may elect to use Weighted Average Cost if applied consistently from commencement. A major concern identified by PwC is the extensive responsibility placed on VASPs. The firm described the VASP as a “de facto tax collector”, noting that providers must withhold WHT on disposals, deduct stamp duty in token units, enforce Tax ID requirements before account activation and file comprehensive returns. They must also charge VAT on their service fees and remit their own taxes within prescribed timelines. The financial consequences of non-compliance are significant. According to PwC, “VASP or P2P marketplace non-compliance attracts a penalty of N10,000,000 for the first month and N1,000,000 for ea
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