Nigeria introduces 1% withholding tax on cryptocurrency exchanges

Nigeria is set to impose a 1% withholding tax on transactions processed through cryptocurrency exchanges operating in the country, according to Crypto News.

The move places Nigeria among a small but growing group of African states seeking to capture revenue from a market that has long operated at the edges of formal regulation. Crypto exchanges servicing Nigerian users will be required to deduct the levy at source, in line with withholding mechanisms already used for other categories of financial transactions.

Nigeria has emerged as one of the largest retail crypto markets in Africa, a position that has put regulators in an uneasy stance. The Central Bank of Nigeria restricted banks from servicing crypto firms in 2021, a measure that pushed significant volumes of trading onto peer-to-peer channels. That policy was reversed under President Bola Ahmed Tinubu’s administration, which has signalled a more open approach to digital assets alongside broader economic reforms.

The new withholding framework sits within a wider overhaul of Nigeria’s tax administration, which has historically collected less revenue than peers of comparable size. Bringing digital-asset transactions into the formal tax net has been presented as a way both to broaden the revenue base and to legitimise an industry that millions of Nigerians already use.

Industry players have warned that heavy taxation could push traders back toward informal channels, as happened in the wake of earlier restrictions. How the 1% levy is enforced against foreign-headquartered exchanges — many of which serve Nigerian users without a domestic office — will determine much of its practical impact. For now, the policy signals that Lagos intends to treat cryptocurrency as a taxable part of the economy rather than a peripheral one.

Sources

This report was written from coverage published by the following news organisations. Follow the links for the original reporting.

• Crypto News — Nigeria sets 1% crypto tax withholding for exchanges